Free Statement - District Court of Arizona - Arizona

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Ira M. Schwartz (I.D. No. 010448) Michael A. Cordier (I.D. No. 014378) DeCONCINI McDONALD YETWIN & LACY, P.C. 7310 N. 16th Street, Suite 330 Phoenix, Arizona 85020 Telephone (602) 282-0500 Facsimile (602) 282-0520
Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA

DECONCINI MCDONALD YETWIN & LACY, P.C.

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16th Street, Suite 330 Phoenix, Arizona 85020

Erchonia Medical Inc., et al Plaintiff, v. Miki Smith, et al Defendants. ____________________________________ Erchonia Medical Inc., et al Plaintiff, v. Miki Smith, et al Defendants. ____________________________________ Robert E. Moroney, LLC Plaintiff, v. Erchonia Medical, Inc., et al Defendants.

Case No.:CIV 02-2036-PHX-MHM Consolidated with CIV 02-2048-PHX-MHM and CIV 02-2353-PHX-MHM

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ERCHONIA MEDICAL INC. AND KEVIN TUCEK'S STATEMENT OF FACTS IN SUPPORT OF ITS RESPONSE TO CONSOLIDATED MOTION FOR SUMMARY JUDGEMENT RE INFRINGEMENT OF U.S. PATENT NO. 6,013,096

Case 2:02-cv-02036-MHM

Document 340

Filed 08/04/2006

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Erchonia Medical Inc. and Kevin Tucek

(collectively referred to as

"Erchonia") submit this statement of facts in support of its Response to Robert Moroney's and Robert E. Moroney, LLC's Consolidated Motion for Summary Judgment of Non-

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Infringement of U.S. Patent No. 6,013,096. This Statement of Facts is submitted in
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accordance with Local Rule 56.1, Rules of the United States District Court for the District
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of Arizona.
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1.
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Kevin Tucek ("Tucek") is the owner of U.S. Patent No. 6,013,096 (the "'096 Patent") issued January 11, 2000 entitled Hand-Held Laser Light Generator Device.

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Deposition of Kevin Tucek June 8, 2005 ("Tucek 2005 depo.") Pp. 19, ln. 21-22
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and Exhibit 1.
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2.

Erchonia Medical Inc. is the exclusive manufacturer and distributor of the devices covered by the `096 Patent. Tucek 2005 depo. Pp. 57, ln. 12-15.

3.

Erchonia's laser product was the first laser product of its type to receive FDA market clearance. Deposition of Steven Shanks February 24, 2003 ("Shanks 2003 depo."). Pp. 163, ln. 22- Pp. 164, ln. 5.

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4.

Erchonia was formed by the merger of its two predecessor companies, Tuco Innovations, Inc. ("Tuco") and Majes-Tec Innovations, Inc ("Majes-Tec"). Tucek 2005 depo. Pp. 9, ln. 21-Pp. 10, ln. 7.

5.

Erchonia, directly and through its predecessor companies has been in the business of manufacturing and selling therapeutic laser devices since 1996. Shanks 2003 depo. Pp. 163-164.

6.

Erchonia's relationship with Robert Moroney ("Moroney") began in approximately spring 2001. Deposition of Robert Moroney 2003 ("Moroney 2003 depo.") Pp. 30, ln. 18-Pp. 35, ln. 25.

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Erchonia first met Moroney at a trade show where Moroney was distributing BEFE footbath ionization products. Moroney 2003 depo. Pp. 30, ln. 14-Pp. 35, ln. 25.

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Following this trade show, Moroney approached Steve Shanks of Majes-Tec about distributing a footbath product to be manufactured by Tuco. Moroney 2003 depo. Pp. 35, ln. 4-Pp. 40, ln. 23.

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Robert E. Moroney LLC ("REM") began distributing Erchonia's products on or about May 2001. Moroney 2003 depo. Pp. 39, ln. 21-Pp. 40, ln. 8, Pp. 51, ln. 7-24.

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In approximately February 2002, Erchonia's business relationship with Moroney was terminated. Moroney 2003 depo. Pp. 57.

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On July 18, 2002, Miki Smith, Erchonia's Vice President of Sales, gave notice to Erchonia that he was terminating his employment with Erchonia. Shanks 2003 depo. Pp. 17, ln. 20-Pp. 18, ln. 3, Pp. 21, ln. 17-24, Pp. 56, ln. 6-Pp. 58, ln. 25.

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Dr. George Gonzales, gave Erchonia notice that he was terminating his business relationship with Erchonia just before Miki Smith left Erchonia. Dr. Gonzalez had been doing seminars for Erchonia, where their products were promoted. Shanks 2003 depo. Pp. 112, ln. 2,-Pp. 124, ln.18.

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At the time Erchonia received notice that Mr. Smith and Dr. Gonzalez were leaving Erchonia, Erchonia learned that they would be working for REM. Shanks 2003 depo. Pp. 112, ln. 2,-Pp. 124, ln.18.

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Smith was displaying a prototype Quantum IV Laser on behalf of REM at a trade show, prior to his leaving Erchonia. Deposition of Miki Smith July 8, 2005 ("Smith 2005 depo.") Pp. 169, ln. 24-Pp. 177, ln. 5; Moroney 2003 depo. Pp. 132, ln. 15-25.

15.

Moroney obtained two lasers from Flitton Engineers, Ltd. in May or June of 2002, and provided one of them to Miki Smith and the other to George Gonzalez. Moroney 2003 depo. Pp. 132, ln. 15-25.

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The Quantum IV Laser sold by REM was manufactured by Flitton Engineers Ltd. ("Flitton") of Bedfordshire, England. 30(b)(6) Deposition of Robert E. Moroney, LLC February 28, 2005 ("Moroney LLC 2005 depo.") Pp. 15, ln. 13-15.

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The laser product manufactured by Flitton was known as the Radiant Health Laser in the U.K. and known as the Quantum IV Laser when distributed in the U.S. Deposition of Paul DeAngelis July 26, 2005 ("DeAngelis 2005 depo.") Pp. 20, ln.

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Paul DeAngelis ("DeAngelis") was the owner and manager of Flitton, and was actively involved in the manufacturing of the Quantum IV Laser. Deposition of Paul DeAngelis February 27, 2003 ("DeAngelis 2003 depo.") Pp. 8, ln. 3-Pp. 9, ln.

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DeAngelis testified the first versions of the design for the circuit board for the Quantum IV Lasers, which were required for manufacturing, were created in the fall

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of 2001. DeAngelis 2003 depo. Pp. 42, ln. 15­Pp. 48, ln. 23. 20. The first completed circuit boards were delivered to Flitton in November 2001. DeAngelis 2003 depo. Pp. 52, ln. 3-Pp. 53, ln. 21. 21. Flitton made several changes to the components and design of the Quantum IV Laser up until September 2002. DeAngelis 2003 depo. Pp. 60, ln. 14-Pp. 62, ln. 25; Pp. 64, ln. 11-Pp. 68, ln. 11. 22. Flitton sold 10 lasers to Aqua-Detox. Neil Bivens is a director of Aqua-Detox and was involved in the purchase of lasers by Aqua-Detox. DeAngelis 2003 depo. Pp. 74, ln. 7-9; Pp. 125, ln. 9-23. 23. At one point, Flitton manufactured a prototype Quantum IV Laser unit, which may have been provided to Neil Bivens and never returned. This prototype laser

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contained a laser diode module using a rod lens. DeAngelis 2005 depo. Pp 41, ln. 6-21. 24. Moroney knew Neil Bivens and had several conversations with him about starting a business relationship related to the sale of Quantum IV Lasers. Deposition of Robert Moroney June 23, 2005 ("Moroney 2005 depo.") Pp. 65, ln. 6-Pp. 71, ln. 14; DeAngelis 2005 depo. Pp. 45, ln. 20-Pp. 49, ln. 23. 4
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25.

Flitton sold 10 laser units to Niel Bivens of Aqua Detox in December 2001. DeAngelis 2003 depo. Pp. 74, ln. 7-9, Pp. 125, ln. 9-23.

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REM was the only party to sell the lasers manufactured by Flitton in the U.S. DeAngelis 2003 depo. Pp. 113, ln. 13-22.

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Flitton used various types of laser diodes in the Quantum IV Laser. DeAngelis 2005 depo. Pp. 30, ln. 5-Pp. 31, ln. 6.

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Flitton purchased most of the laser diodes used in the Quantum IV Laser from a United States company, Diode Laser Concepts. DeAngelis 2005 depo. Pp. 31, ln.

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Among the diode modules purchased from Diode Laser Concepts by Flitton are model numbers: FNY-RL3-19; FAT-MS3-50; FAY-MS3-50; FAY-FE3-50. DeAngelis 2005 depo. Pp. 31, ln. 24-Pp. 36, ln. 6, and Exhibit 2, documents ERC4357-4367.

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30.

Diode Laser Concepts laser diode module number FNY-RL3-19 is a line generator laser diode module which contains both a collimating lens and a rod lens, and which generates a planar beam, which appears as a line when it hits a surface. Deposition of Mike Robinson, Sept. 22, 2005 ("Robinson depo.") Pp. 74, ln. 13-Pp. 75, ln. 4.

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31.

At a trade show in New Orleans, while still working for Erchonia, Miki Smith demonstrated and used a prototype Quantum IV Laser. He did this for the benefit of REM. Smith 2005 depo. Pp. 162, Pp. 169, ln. 24-Pp. 178, ln. 24.

32.

This prototype laser looked like most of the later manufactured Quantum IV Laser units, but it did not contain a key lock, and it may have had a different size head. Smith 2005 depo. Pp. 176, ln. 13-25.

33.

Erchonia has obtained a Quantum IV Laser Device and has reviewed an additional unit during discovery. Declaration of Kevin Tucek ("Tucek Decla.") at ¶ 3-5.

34.

The Quantum IV Lasers are hand-held laser light generator devices used for medical therapy. DeAngelis 2005 depo. Pp. 21, ln. 25- Pp. 22, ln. 3. 5

Case 2:02-cv-02036-MHM

Document 340

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35.

The Quantum IV Laser units have a hand-held wand. This wand is hollow and is freely movable, since it is attached to the housing by a coiled cord. DeAngelis 2005 depo. Pp. 57, ln. 16-Pp. 60, ln. 24; See photographs attached to Declaration of

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Kevin Tucek ("Tucek Photos.") 3, 4, 7, 36, 37 and Declaration of Kevin Tucek
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("Tucek Decla.") at ¶ 7.
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In use, the Quantum IV Laser generates a laser beam. This beam is generated from a laser diode modules contained in the wand. DeAngelis 2005 depo. Pp. 25, ln. 8-

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The Quantum IV Laser device has a housing, which has an interior chamber and has electronics located in the interior chamber. DeAngelis 2005 depo. Pp. 23, ln. 6-14;

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Pp. 59, ln. 10-23; Tucek photos. 9, 10, 38. The Quantum IV Laser has a battery mounted in the interior of the housing chamber. DeAngelis 2005 depo. Pp. 23, ln. 2-4. Tucek photos 10. 39. The Quantum IV Laser has a wand with an interior cavity which is capable of being retained in the hand of a user. DeAngelis 2005 depo. Pp. 22, ln. 4-Pp. 23, ln. 18. Tucek photos. 3, 4, 37 See Tucek Decla. ¶7. 40. On the end of the wand of the Quantum IV Laser is a head portion, into which the laser diodes have been inserted. DeAngelis 2005 depo. Pp. 25, ln. 8-18. Tucek Decla ¶7. Tucek Photos. 3, 4, 27, 28. 41. The Quantum IV Laser has a cable which attaches the wand portion to the housing where the battery is located. DeAngelis 2005 depo. Pp. 23, ln. 6-25. Tucek Photos. 9, 10. Tucek Decla, ¶7. 42. The Quantum IV Laser has start and stop buttons which start and stop the operation of the machine. DeAngelis 2005 depo. Pp. 60, ln. 15-24. Moroney 2005 depo. Pp. 50, ln. 11-Pp. 51, ln. 9. Tucek Photos. 19, 20.

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43.

The Quantum IV Laser has an electronic timing circuit, which allows the user to input a time period for the laser to run. DeAngelis 2005 depo. Pp. 62, ln. 13-Pp. 63, ln. 2. Moroney 2005 depo. Pp. 50, ln. 11-24.

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REM, through its related distribution company, A Major Difference, Inc. has described its products as generating a concentrated line. Moroney 2005 depo. Pp. 54, ln. 23-Pp. 55, ln. 4; See document REM03389-03395.

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The beam emitted by the Quantum IV Laser, as tested by Erchonia measures 5.83 mm by 1.10 mm at a distance of approximately 4-6 inches from a the surface of a

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work piece, which is the usual working distance for this type of device. This
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represents a 5.3:1 ratio. At this distance, the width of the beam does not appear to
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vary at any point in the length of the generated beam. See Declaration of Kevin Tucek at ¶ 6. 46. A laser diode with only a collimating lens and without a focusing lens will usually generate an elliptical beam. Robinson depo. Pp. 55, ln. 21-Pp. 60, ln. 13, and Exhibits 50 and 51. 47. Such an elliptical beam will usually have a length to width ratio of approximately 3.5 to 1 or 4 to 1. Robinson depo. Pp. 33, ln. 14-20. 48. AMD's literature related to the sale of the Quantum IV Lasers indicates that their laser products generate their laser energy in the form of a "very concentrated line." Moroney 2005 depo. Pp. 54, ln. 23-Pp. 55, ln. 4, and REM documents, REM0338903395. 49. Diode Laser Concepts, Inc. part number FNY-RL3-19 is a line generator laser diode that was purchased and used by Erchonia. This part was supplied to meet

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Erchonia's specified requirements and is known by Erchonia to contain a collimating lens and a rod lens, and when used, generates a line when focused on a surface. Tucek Decla. at ¶ 8.

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50.

In certain cases the TO can of a laser diode or the housing in which it is placed can function as an aperture. Robinson depo. Pp. 80, ln. 3-Pp. 83, ln. 18.

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Flitton's first invoice for products sold to Robert E. Moroney, LLC is dated July 9, 2002. DeAngelis 2003 depo. Pp. 138, ln. 23-Pp. 139, ln. 3.

Quantum IV Laser Unit
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Erchonia has in its possession a Quantum IV Laser and that this has been used as an
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DECONCINI MCDONALD YETWIN & LACY, P.C.

exhibit at several depositions. See e.g. DeAngelis 2005 deposition Exhibit 1 and pages 18,
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ln. 19-Pp. 19, ln. 15.
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Erchonia respectfully requests the opportunity to provide this

Quantum IV Laser to the Special Master (and the Court) for review in connection with
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consideration of the pending Motion for Summary Judgment.

DATED this 4th day of August, 2006. DeCONCINI MCDONALD YETWIN & LACY

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By s/Ira M. Schwartz Ira M. Schwartz Michael A. Cordier 7310 N. 16th St., Suite 330 Phoenix, Arizona 85020 (602) 282-0500 Attorneys for Erchonia Medical Inc. and Kevin Tucek

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Certificate of Service I certify that on August 4, 2006 , I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to those attorneys registered with CM/ECF: Michael Warzynski, Esq. JARDINE BAKER HICKMAN & HOUSTON PLLC 3300 N. Central Avenue, Suite 2600 Phoenix, AZ 85012 Co-Counsel for Erchonia Medical Inc. Benjamin B. Lieb, Esq. Robert Brunelli, Esq. SHERIDAN ROSS PC 1560 Broadway, Suite 1200 Denver, CO 80202 Attorneys for Robert E. Moroney, LLC, Robert E. Moroney, and A Major Difference Inc. David Bray, Esq. MARISCAL WEEKS MCINTYRE & FRIEDLANDER PA 2901 N. Central Avenue, Suite 200 Phoenix, AZ 85012 Attorneys for Robert E. Moroney, LLC, Robert E. Moroney, and A Major Difference Inc. Gregory L. Miles, Esq. Lori A. Curtis, Esq. DAVIS MILES PLLC 1550 E. McKellips Road, Suite 101 Mesa, AZ 85203 Attorneys for John and Claudette Brimhall Dominic L. Verstagen, Esq. KUNZ PLITT HYLAND DEMLONG & KLEIFIELD 3838 N. Central Avenue, Suite 1500 Phoenix, AZ 85012 Attorneys for John and Claudette Brimhall Scott A. Salmon, Esq. THE CAVANAGH LAW FIRM 1850 N. Central Avenue, Suite 2400 Phoenix, AZ 85004 Attorneys for George Gonzalez and Lorena Guzman Gordon S. Bueler, Esq. BUELER JONES, LLP 1300 N. McClintock Drive, Suite B-4 Chandler, AZ 85226 Attorneys for Miki Smith and KMS Marketing, Inc. /////

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And a copy mailed to: Gale R. Peterson, Esq. Cox Smith Matthews 112 East Pecan Street, Suite 1800 San Antonio, TX 78206 Special Master s/Ira M. Schwartz

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