Free Response to Motion - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE LG ELECTRONICS U.S.A., INC., LG ELECTRONICS, INC. and LG ELECTRONICS MONTERREY MEXICO, S.A., DE, CV, Plaintiffs, v. WHIRLPOOL CORPORATION, WHIRLPOOL PATENTS COMPANY, WHIRLPOOL MANUFACTURING CORPORATION and MAYTAG CORPORATION, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Civil Action No. 08-332 (GMS)

LG ELECTRONICS' RESPONSE TO WHIRLPOOL'S PARTIAL MOTION TO DISMISS AND MOTION TO EXTEND THE TIME WITHIN WHICH WHIRLPOOL MAY ANSWER THE COMPLAINT LG Electronics USA, Inc., LG Electronics, Inc. and LG Electronics Monterrey Mexico, S.A. de C.V. ("LG Electronics"), respectfully submit this response to Whirlpool's Motion to Dismiss Counts Four and Five of Plaintiffs' Complaint and to Whirlpool's Motion for Extension of Time to Respond to Plaintiffs' Complaint. I. BACKGROUND On January 23, 2008, Whirlpool filed a complaint in the International Trade Commission alleging that LG Electronics infringes five Whirlpool patents ("ITC patents"). In the Matter of Certain Refrigerators and Components Thereof, 337-TA-632 (US ITC). LG Electronics denied Whirlpool's allegations and through its answer and discovery notified Whirlpool why Whirlpool's claims were without merit. Because Whirlpool declined to withdraw its allegations, LG Electronics on April 16, 2008, filed a parallel District Court declaratory judgment action in the United States District Court for the District of New Jersey seeking a declaration of non-

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infringement, invalidity and or unenforceability of all five Whirlpool ITC patents.

LG

Electronics USA Inc., et al. v. Whirlpool Corporation, et al., Civil Action No. 08-1869 (FSH) (PS) (D.N.J.), now Civil Action No. 08-332 (GMS) (D. Del.). In addition, LG Electronics USA, Inc. and LG Electronics, Inc. filed, in this court, a complaint for patent infringement ("LG Electronics' Complaint"), seeking relief on three LG patents that LG Electronics USA, Inc. and LG Electronics, Inc. contend Whirlpool is infringing. LG Electronics USA, Inc., et al. v.

Whirlpool Corp., et al., Civil Action No. 08-234 (GMS) (D. Del.). In the ITC case, LG Electronics identified invalidating prior sales of Whirlpool's own products relative to two of the patents that Whirlpool asserted in the ITC and requested discovery on those products. On the very day that Whirlpool agreed to provide this discovery, Whirlpool moved to terminate the ITC Investigation as to the two patents: United States Patent Number 6,971,730 ("the '730 patent") and United States Patent Number 7,240,980 ("the '980 patent"). Exh. A. Whirlpool also gave LG Electronics a covenant not to sue on these two patents and filed a motion to dismiss the same two patents from this action. Whirlpool subsequently filed a motion for an extension of time to answer LG Electronics' declaratory judgment complaint, to avoid filing pleadings on these patents, before its motion to dismiss was decided. In Civil Action No. 08-234 (GMS), Whirlpool answered LG Electronics' Complaint, counterclaiming for infringement of the same three patents that remained before the International Trade Commission and in the New Jersey District Court. C.A. No. 08-234 (GMS), D.I. 5. In its original Answer and Counterclaims, Whirlpool alleged that LG Electronics infringed four additional patents. Shortly after that filing, Whirlpool amended its Answer and Counterclaims in Civil Action No. 08-234 (GMS) to drop one of the newly added patents, without explanation. C.A. No. 08-234 (GMS), D.I. 8.

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The parties agreed to transfer this case from the New Jersey District Court to this Court, in view of the overlapping issues. Attached as Exhibit B is a copy of the parties' Stipulated Transfer Order that was entered by the New Jersey District Court and a copy of this Court's Acknowledgment of Transfer of the New Jersey Action. In that Transfer Order, the parties stipulated and the New Jersey District Court ordered that LG Electronics would have two weeks after the transfer to this Court to respond to Whirlpool's pending motions. completed on June 4, 2008. II. LG ELECTRONICS' RESPONSE TO WHIRLPOOL'S MOTION TO DISMISS AND MOTION TO EXTEND TIME LG Electronics does not oppose dismissing from this case the '730 and '980 patents Provided the dismissal is without prejudice to LG Electronics' rights to pursue in separate proceedings appropriate causes of actions and remedies associated with Whirlpool's allegations and assertions of infringement of those patents. LG Electronics notes that the ITC Transfer was

Administrative Law Judge recently recommended dismissing these two patents from the ITC investigation. Exh. C. LG Electronics further notes that Whirlpool has made and pursued serious allegations of patent infringement against LG Electronics, apparently without conducting an appropriate investigation. The lack of care with which Whirlpool has made these allegations and pursued its claims of infringement has caused LG Electronics to incur substantial legal expenses and suffer significant damages and injury. While LG Electronics does not wish to add further issues to this declaratory judgment action, LG respectfully reserves its rights to seek appropriate relief and remedies in an appropriate forum, at an appropriate time. LG Electronics also remains concerned that Whirlpool's remaining allegations of infringement are not well-founded and that Whirlpool may not have made an appropriate effort to investigate its infringement allegations for those Whirlpool patents that remain in this case, or

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the pending related action before this Court. LG Electronics therefore reserves its right to take discovery and initiate appropriate causes of action and claims for relief regarding the patents that Whirlpool continues to assert against LG Electronics before this Court. III. CONCLUSION Having agreed to Whirlpool's proposed dismissal, LG Electronics requests that Whirlpool be required to answer LG Electronics' Complaint within ten days following the court's entry of any order dismissing the '730 and '980 patents from this case.

Dated: June 18, 2008

/s/ Richard K. Herrmann Richard K. Herrmann (I.D. #405) Mary B. Matterer (I.D. #2696) Amy A. Quinlan (I.D. # 3021) MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 (302) 888-6800 [email protected] Patrick J. Coyne Richard L. Stroup Walter D. Davis, Jr. Jeffrey W. Abraham FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, L.L.P. 901 New York Avenue, N.W. Washington, D.C. 20001-4413 (202) 408-4000 [email protected] [email protected] [email protected] [email protected] Attorneys for Plaintiffs LG ELECTRONICS U.S.A., INC., LG ELECTRONICS, INC. and LG ELECTRONICS MONTERREY MEXICO, S.A., de CV

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EXHIBIT A

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EXHIBIT B

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Case 2:08-cv-01869-FSH-PS Document 32 23 Filed 06/18/2008 Page 32 1 of 2 Case 1:08-cv-00332-GMS Document Filed 06/08/2008 Page of 40

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EXHIBIT C

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UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.


In the Matter of

CERTAIN REFRIGERATORS AND COMPONENTS THEREOF

Inv. No. 337-TA-632

ORDER NO. 8:

INITIAL DETERMINATION GRANTING COMPLAINANTS'
MOTION FOR PARTIAL TERMINATION BASED ON
WITHDRAWAL OF CERTAIN ALLEGATIONS IN THE
COMPLAINT

(June 9, 2008)
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On May 1, 2008, complainants Whirlpool Patent Company, Whirlpool Manufacturi~
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Corporation, Whirlpool Corporation, and Maytag Corporation (collectively "Whirlpool") fi!ti a ;::, ~ ~~ motion to partially terminate the investigation based on their withdrawal of two of the five
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originally-asserted patents. (Motion Docket No. 632-003.) Specifically, Whirlpool withdraws its infringement claims with respect to U.S. Patent Nos. 6,971,730 and 7,240,980 (the "withdrawn patents"). On May 12,2008, respondents LG Electronics, Inc., LG Electronics, USA, Inc., and LG Electronics Monterrey Mexico S.A. de C.V. (collectively "LG") filed a response supporting the motion to partially terminate, but arguing that LG should still be entitled to discovery related to the withdrawn patents to support a claim that Whirlpool failed to comply with its pre-filing obligations. I Under Commission Rule 210.21(a)(1), "[a]ny party may move at any time prior to the

'1 Whirlpool's motion for leave to file a reply in support of its motion for partial termination is hereby GRANTED. (Motion Docket No. 632-004.)

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issuance of an initial determination on violation of section 337 of the Tariff Act of 1930 for an order to terminate an investigation in whole or in part as to any or all respondents, on the basis of withdrawal of the complaint or certain allegations contained therein...The presiding administrative law judge may grant the motion in an initial determination upon such terms and conditions as he deems proper." 19 C.F.R. § 210.21 (a)(l). Based on a review of the motion and responses thereto, the Court will grant Whirlpool's motion and terminate the investigation with respect to the withdrawn patents. While LG supports the partial termination motion, it seeks a ruling from the Court allowing it to continue with discovery related to the withdrawn patents for the purpose of supporting its argument that Whirlpool failed to conduct an adequate pre-filing investigation. The Court declines to allow such discovery and instead instructs the parties to focus on the three patents that are still active in this investigation. The Court sees no value in extending the burden and expense of discovery by allowing LG to take discovery solely for the purpose of gathering evidence for a possible sanctions motion related to patents that are no longer part of this investigation. 2 Accordingly, it is the Court's Initial Determination that Motion No. 632-003 be GRANTED and the investigation be partially terminated with respect to U.S. Patent Nos. 6,971,730 and 7,240,980. This initial determination is hereby certified to the Commission.

The Court also rejects LG's argument that evidence related to Whirlpool's pre-filing investigation with respect to the withdrawn patents is relevant to demonstrate a "pattern of conduct" by Whirlpool in failing to perform adequate pre-filing investigations. LG Resp. at 8 11. LG is still able to take discovery related to Whirlpool's pre-filing investigation with respect to the three remaining patents, and can still move for sanctions if the evidence proves that Whirlpool failed to perform an adequate infringement analysis on the three remaining patents prior to initiating this investigation.
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Pursuant to 19 c.P.R. § 21O.42(h), this Initial Detennination shall become the detennination of the Commission unless a party files a petition for review of the Initial Detennination pursuant to 19 C.P.R. § 21O.43(a), or the Commission, pursuant to 19 c.P.R. § 210.44, orders, on its own motion, a review ofthe Initial Detennination or certain issues herein.

SO ORDERED.

Theodore R. Essex Administrative Law Judge

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IN THE MATTER OF CERTAIN REFRIGERATORS AND COMPONENTS THEREOF

Iov. No. 337-TA-632

CERTIFICATE OF SERVICE I, Marilyn R. Abbott, hereby certify that the attached ORDER was served upon, Rett Sootherly, Esq., Commission Investigative Attorney, and the following parties via fIrst class mail and air mail where necessary on June 9, 2008.

Man yn R. bbott, Secretary U.S. International Trade Commission 500 E Street, SW, Room 112A Washington, D.C. 20436

COMPLAINANTS WHIRLPOOL PATENTS COMPANY, WHIRLPOOL MANUFACTURING CORPORATION, WHIRLPOOL CORPORATION, MAYTAG CORPORATION: Scott F. Partridge, Esq.
Paul R. Morico, Esq.
Amanda Woodall, Esq.
J;:lizabeth L. Durham, Esq.
BAKER BOTTS, LLP
One Shell Plaza
910 Louisiana Street
Houston, TX 77002
Frederick G Michaud, Esq.
Kristiana Brugger, Esq.
BAKER BOTTS, LLP
The Warner
1299 Pennsylvania Avenue, NW
Washington, DC 20004-2400


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IN THE MATTER OF CERTAIN REFRIGERATORS
ANDCO~ONENTSTHEREOF

Inv. No. 337-TA-632

CERTIFICATE OF SERVICE - PAGE 2 RESPONDENTS LG ELECTRONICS, INC, LG ELECTRONICS, USA, INC and LG ELECTRONICS MONTERREY

Thomas L. Jarvis, Esq. Andrew C. Sonu, Esq. Richard L. Stroup, Esq. Parmanand K. Sharma, Esq. Paul C. Goulet, Esq. FINNEGAN, HENDERSON, FARABOW
GARRETT & DUNNER, LLP.
901 New York Avenue, NW
Washington, DC 20001-4413


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IN THE MATTER OF CERTAIN REFRIGERATORS ANDCOMWONENTSTHEREOF

lov. No. 337-TA-632

CERTIFICATE OF SERVICE - PAGE 3

PUBLIC MAILING LIST

Sherry Robinson
LEXIS - NEXIS
8891 Gander Creek Drive
Miamisburg, OR 45342
Ronnita Green
Thomson West
1100 Thirteen Street, NW, Suite 200
Washington, D.C. 20005