Elan Microelectronics Corporation v. Apple, Inc.

Filing 225

Declaration of Derek Walter In Support of Apple Inc.'s Motion to Compel (1) Discovery Relating to US Sales; (2) Documents Improperly Withheld on the Basis of Privilege; and (3) Inventor Depositions filed byApple, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 3, # 3 Exhibit 5, # 4 Exhibit 6, # 5 Exhibit 7, # 6 Exhibit 9, # 7 Exhibit 10, # 8 Exhibit 15, # 9 Exhibit 22, # 10 Exhibit 24, # 11 Exhibit 28, # 12 Exhibit 29, # 13 Exhibit 30, # 14 Exhibit 31, # 15 Exhibit 32, # 16 Exhibit 33, # 17 Exhibit 36)(Greenblatt, Nathan) (Filed on 5/31/2011)

EXHIBIT 6

Case 2:10-cv-00014-GMN -PAL Document 29

I

Filed 11/22/10 Page 1 of 41

ROBERT 1. CALDWELL, ESQ.

Nevada Bar No. 7637
2

MATTHEW J. CHRISTIAN, ESQ.

Nevada Bar No. 8024
3

KOLESAR & LEATHAM, CHTD.

4

Las Vegas, Nevada 89102
Telephone: [phone]

5

Facsimile: [phone]
E-mail:
rcaldwell(gklnevada.com
mchrstian(gklnevada.com

3320 W. Sahara Avenue, Suite 380

6
7

SEAN P. DEBRUINE, ESQ.
Admitted Pro Hac Vice

8

ALSTON & BIRD LLP

9

275 Middlefield Road, Suite 200
Menlo Park, California 94025
Telephone: [phone]

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Attorneys for Plaintiff,
ELAN MICROELECTRONICS
CORPORATION

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ELAN MICROELECTRONICS
CORPORATION,

Case No.: 2:

18

Plaintiff,
19

vs.

20

PIXCIR MICROELECTRONICS CO. LTD.,

i O-cv-OOOi

4-GMN-PAL

ELAN MICROELECTRONICS
CORPORATION'S SURRPL Y IN
OPPOSITION TO DEFENDANT
PIXCIR'S REPLY IN SUPPORT OF
MOTION TO DISMISS

21

Defendant.
22
23

24 Plaintiff, Elan Microelectronics Corporation ("Elan"), by and through its counsel of
Kolesar & Leatham, Chtd. and

25 record, Robert 1. Caldwell, Esq. and Matthew J. Chrstian, Esq. of

26 Sean P. DeBruine, Esq. of Alston & Bird LLP, hereby submits this Sureply in Opposition to

its Motion to Dismiss (Doc. No. 16).

27 Defendant Pixcir's Reply (Doc. No. 23) in Support of

28
835539.DOC (7735-2)

Page i of 10

Case 2:10-cv-00014-GMN -PAL Document 29

I

Filed 11/22/10 Page 2 of 41

This Sureply is made and based upon the papers and pleadings filed in this action, the

2

following memorandum of points and authorities, the attached declarations and exhbits, and any

3

oral argument which the Cour may entertain on this matter.

4

DATED this 22nd day of

November, 2010.

5

6
7

By:
ROBERT J. CAi

8

Nevada Bar . . 7637

9

Nevada Bar No. 8024
3320 W. Sahara Avenue, Suite 380

MATTHEW 1. HRISTIAN, ESQ.

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835539.DOC (7735-2)

Page 2 of 10

Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 3 of 41

MEMORANDUM OF POINTS AND AUTHORITIES

I

2 i.

INTRODUCTION

3

Pixcir moved to dismiss this matter based on an ostensible lack of personal jurisdiction.

4

The brief in support of that motion totaled less than five full pages, and it was supported by a

5

single cursory declaration. Elan opposed that perfuctory motion, pointing out the publicly

6

available evidence showing that (1) Pixcir representatives have travelled to this district to do

7

business in connection with the products Elan accuses of infringement; (2) Pixcir has directed

8

its marketing activities associated with those products at this foru; and (3) Pixcir has sold

9

those products into the U.S. and this district via an established distribution chanel in the

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stream of commerce.

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and detailed declarations attempting to refute that evidence. Tellngly, Pixcir's Reply brief

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Only after Elan fied its response did Pixcir come forward with new legal arguments

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its original brief. Following leave of

now coves sixteen pages, more than thrice the length of

16

Cour to do so, Elan provides this Sureply to address both the numerous legal issues raised for
the first time in Pixcir's Reply and the new "facts" alleged in the declarations submitted
therewith.

Importantly, Pixcir does not deny its direct contacts with this judicial district, nor the

17
18

United States, generally. Nor does Pixcir contest that it has sold products into the United States

19

and this judicial district via established distribution chanels. However, Pixcir does misapply the

20

law when it attempts to argue that these puroseful actions do not support jurisdiction. Even in

21

light of the new facts and arguents presented by Pixcir, there can be little doubt that Elan has

22

made a prima facie showing of this district's jurisdiction over Elan's patent infringement claims

23

against Pixcir, such that Pixcir's Motion to Dismiss should be denied.

24

/ II

25

11/

26

/ II

27

II /

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835539.DOC (7735-2)

Page 3 of 10

Case 2:10-cv-00014-GMN -PAL Document 29

I II.
2

ARGUMENT
A.

Pixcir Has Purposefully Sold Its Accused Products via an Established

Distribution Channel into the United States and This District.

3

4

Filed 11/22/10 Page 4 of 41

PixcIr would have this Cour believe that the promotion and sale of its products into this
"random, fortuitous, or attenuated contacts" completely beyond its

5

district are the result of

6

contro!. See Defendant's Reply in Support of

7

Br.") at 8. To make that argument, Pixcir rests on selective declarations and a misapprehension

8

and/or misapplication of

9

the modern global supply chain for electronic products, even though it capitalizes on the same

Motion to Dismiss (Docket No. 23) ("Reply

the law. In effect, Pixcir attempts to hide behind the unque nature of

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supply chain to sell its products into the United States and this judicial district.

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fuction. Those touchscreens are incorporated as user input devices in personal computers,

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PixcIr supplies semiconductors and solutions to enable touchscreen electronic devices to

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smar phones and other electronic devices. In the modern, globalized economy, such electronic

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companies whose brands appear on the finished products. Declaration ofIan Chung in Support

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ofPlaintifts Opposition ("Chung Dec!.") at ir 3.
In particular, companies such as Dell and Hewlett-Packard ("HP") have their own

18

branded products manufactued to their specifications by third part Original Equipment

19

Manufacturers ("OEM"). These OEM manufacturers purchase components for those products

20

from companies such as Elan and Pixcir, id., although as Pixcir notes, subassembly suppliers

21

often exist between Elan or Pixcir alike and the OEM manufacturers, see Reply Br. at 7-8. The

22

subassemblies are not staple products; rather, they incorporate Pixcir's touchscreen controllers

23

and are manufactured specIfically for the next distributor down the supply chain, namely the

24

OEM manufactuers.

25

Importantly, it is the touchscreen controller, not the subassembly, that determines the

26

ultimate touchscreen fuctions in a finished product. Despite the multiple parties involved,

27

component suppliers such as Elan and Pixcir often do have knowledge of

28

manufacturers and brand companies that purchase their components. Chung Dee!. at ir 4. In
835539.DOC (7735-2)

Page 4 of 10

the OEM

Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 5 of 41

I

2

exists between the component supplier and the involved brand company to ensure that the

3

component meets the latter's specification and fuctions properly in the finished product. Id. at

4

ir 5. While those contacts may physically occur outside the United States, they stil involve

5

contact and communication with U.S. companies. Id. Significantly, the contacts are purposeful

6

actions of sellng products into the U.S. via an established distribution chanel-a tight, global

7

supply chain in the modern economy. Indeed, Pixcir admits-actually touts-its own contacts

8

with the makers of several "leading brands" of computers. See Second Declaration ofKai Zhu

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particular, if a component is not a relatively standard part, direct communication almost always

in Support of Opposition to Pixcir Microelectronics CO.'s Motion To Dismiss ("Zhu 2nd

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Dee!.") at ir 4 and Exh. i. PixcIr fuher admits that it has worked directly with those computer

11

makers to obtain Microsoft certifications for the very touchscreen solutions Elan here accuses

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patent infringement. Id. Microsoft, headquartered in Redmond, Washington, in the United

States, is as American as apple pie. To suggest that Pixcir has no ties to the U.S. or this judicial
district, simply disregards reality.

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makers who sell the accused Pixcir touchscreen solutions into this country, see Reply Br. at 7-

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10, in an attempt to show a lack of

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the "stream of commerce" theory. However, Pixcir's arguments are based on a misreading of

19

the relevant case law.

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Pixicir repeatedly emphasizes the intermediate vendors between itself and the computer

"minimum contacts" required to establish

jurisdiction under

By its very definition, the stream of commerce cannot be blocked by intermediate

21

subassembly vendors. In fact, the Federal Circuit has specifically held that efforts to "serve,

22

directly or indirectly, (a) market" may give rise to jurisdiction. See Beverly Hils Fan Co. v.

23

Royal Sovereign Corp., 21 F.3d 1558, 1566-68 (quoting World-Wide Volkswagen Corp. v.

24

Woodson, 444 U.S. 286, 297 (1980)) (emphasis added). The subassembly vendors who

25

implement Pixcir's touchscreen solutions are merely one link in the global supply chain that

26

qualifies as the type of "established distribution channel" that was recognized by the Beverly

27 Hils cour. See id. at 1565-66.

28
835539.DOC (7735-2)

Page 5 of 10

Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 6 of 41

its products into the U.S. through this established distribution chanel is

I Pixcir's sale of

2 far from a "fortitous circumstance" based entirely on the unforeseen actions of others. See

3 World-Wide Volksagen Corp, 444 U.S. at 295-96. Rather, Pixcir purosefully directed its

4 products through the distribution channel and towards the U.S. See Zhu 2nd Dee!. at ir 4 and
5 Exh. I;Zhu 1st

Dee!. (Docket

No. 18)atirI2andExh. 10

(Docket

No. 18-10). Furher,

as

6 Pixcir is no doubt aware, when Pixcir's accused touchscreen solutions are sold to those

those companies' products into the U.S.

7 companies that Pixcir touted as customers, id., sales of

8 as well as this

Dell, Lenovo1, and HP all have

judicial district are essentially inevitable, because

9 significant market shares in the U.S. and in this district. Zhu 1st Dee!. at ir 22 and Exh. 18

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~= :i i (Docketalso argues that Elan's' claims do not "arise out of or relate to" its actions in
!; i Pixcir No. 18-18).
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computer makers to adopt and sell its touchscreen solutions into the United States.

infringement under § 271(b) excludes

E; ! ~ & 13 See Reply Br. at 8-9. Pixcir claims that inducement of

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the law is simply wrong. Rather, any

:: .: ~i! 14 extraterritorial activities. Id. at 7-8. That statement of

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infringement, and there is no territorial requirement for this finding. See 35 U.S.C. § 271(b);

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~ 17 MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silcon Corp., 2006 U.S. Dist. LEXIS
18 9353 at *22 (N.D. Ca!. Feb. 24, 2006). Thus, the fact that the subassembly vendors are outside
19 the U.S. cannot frustrate Elan's § 271(b) infringement claim.
20 Also, the existence of

those intermediate vendors, or the "twice removed from" theory

2 i as advanced by Pixcir, see Reply Br. at 8, has no bearing on whether Pixcir has actively

22 induced others to infringe Elan's patent under § 271(b), and Pixcir has cited no authority to the

23 contrary. As Elan established in its Opposition, only jurisdictional questions are present here,
24 and Elan does not need to prove infringement on the pleadings to establish jurisdiction.
25 Synthes (U.S.A.) v. G.M Dos Reis Jr. Ind. Com. De Equip. Medico, 563 F.3d 1285, 1298-99

26

27
28

i Contrary to what Mr. Fuentes has believed, Lenovo is co-headquartered in Morrisvile, North Carolina.
835539.DOC (7735-2)

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Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 7 of 41

I

(Fed. Cir. 2009). Elan has alleged that Pixcir's promotion and sale of

2

district and the U.S. as a whole give rise to liability for inducing infingement. There is no

3

requirement to show that Pixcir's inducement acts took place in this district; nor is it required to

4

show that Pixcir itself directly infringed Elan's patent when being physically in this district. In

5

short, Elan's claims "arise out of and relate to" Pixcir's contacts with this foru.

6

B. Pixcir Has Had Direct Contacts with This District and the United States as a
Whole to Promote Its Accused Touchscreen Controller Products.

7
8

its products into this

In his carefully crafted second declaration, Mr. Fuentes stil does not disclose why he,

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as the Chief Operating Offcer of a Chinese startup company, flew from Switzerland to Las

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Vegas to attend a prominent trade show that was not open to the public. Fuentes 2nd Dee!.

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(Docket No. 23-1) at irir 9-10. While Fuentes repeatedly discusses what he did not do-all in

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the negative-at CES 2009, he does not deny that his trip to this district was for business

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puroses. Although Elan cannot ascertain what Mr. Fuentes actually did at CES 2009 without

14

jurisdictional discovery, Pixcir fails to refute that Fuentes's business trip contributed to the

15

eventual sale ofPixcir's accused products into the U.S. and this district. Thus, Elan's

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inducement infringement claim arises at least in par out of Pixcir' s contacts with this district.

17

Pixcir's theory that its visit must have included some infringement acts to yield

18

incorrect as a matter of law.

19

jurisdiction is

Nor does Mr. Hung deny the DigiTimes report concerning Pixcir's actions targeting the

20

U.S. market through the CES 2009 show. Compare Hung Dee!. (Docket No. 23-2) at irir 2-4

21

with Zhu 1st Dee!. at ir 6 and Exh. 4 (Docket No. 18-4). Fuentes and Hung's declarations really

22

say nothing more than that they are not aware of any Pixcir representatives who showed videos

23

promoting Pixcir products while beingphysicaUy present at CES 2009. The Federal Circuit,

24

however, has long held that such physical presence is not required for jurisdictional minimum

25

contacts with the forum. See Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1361-62 (Fed. Cir.

26

2001) (quoting Quil Corp. v. North Dakota, 504 U.S. 298, 307-08 (1992)) ("(W)e have

27

consistently rejected the notion that an absence of physical contacts can defeat personal

28 jurisdiction.").
835539.DOC (7735-2)

Page 7 of 10

Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 8 of 41

Pixcir also alleges as inadmissible the blog articles that reported on the first day of CES

I

2

2009 and Pixcir's Y ouTube-video marketing activities at the trade show, see Reply Br. at 6,

3

lines 16-18. Again, the Federal Circuit has rejected such a hearsay attack on circumstantial

4

jurisdictional evidence. See

Beverly Hils Fan Co., 21 F.3d at 1562.

Pixcir also somehow assumes that uploading CES-2009-targeted Y ouTube videos onto

5

6

a web site based in California is the same thing as hosting its own web pages in China. See

7

Reply Br. at 10- i 1. Based on that incorrect analogy, Pixcir cites Trintec Indus. v. Pedre

8

Promotional Prods. to argue that its use of

9

The Trintec Indus. decision, however, does not support Pixcir's argument, but rather supports

You

Tube does not support

jursdiction. Id. at i i.

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the opposite; the Trintec cour reasoned that even web pages merely "directed at" a foru favor

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establishing

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jurisdiction, see Trintec Indus. v. Pedre Promotional Prods., 395 F.3d 1275, 1281

(Fed. Cir. 2005). Here, Y ouTube is not merely "directed at," but actually based in California.

As such, Pixcir purosefully reached out to the United States and CES 2009 in order to further

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its goal of sellng its accused products into the United States. It is important to note that as a

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prerequisite to opening a Y ouTube account, Pixcir must have executed binding agreements

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online with Y ouTube and Google, under which Pixcir expressly agreed to jurisdiction in

17

California concernng any disputes arising from the use ofthose services. Zhu 2nd Dee!. at irir

18

5-7 and Exhs. 2-3. This is precisely the type of "puroseful availment" that supports personal

19

jurisdiction under either Fed. R. Civ. P. 4(k)(1) or 4(k)(2).

20

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835539.DOC (7735-2)

Page 8 of 10

Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 9 of 41

I II. CONCLUSION
2 Pixcir has not controverted Elan's complaint or evidence. The Cour should accept

3 Elan's complaint as true, resolve any factual conflicts in the affdavits in Elan's favor, find
4 Elan's prima facie showing of this district's personal jurisdiction over Pixcir, and deny Pixcir's
5 motion to dismiss.

7 , CHTD.
6 DATED this 22nd day of

November, 2010.

8

9

By:
ROBERT J. C

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Nevada Bar No. 8024
3320 W. Sahara Avenue, Suite 380

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MATTHEW J. HRISTIAN, ESQ.

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Las Vegas, Nevada 89102

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SEAN P. DEBRUINE, ESQ.

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ALSTON & BIRD LLP

275 Middlefield Road, Suite 200
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Attorneys for Plaintiff,
ELAN MICROELECTRONICS
CORPORATION

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835539.DOC (7735-2)

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Case 2:10-cv-00014-GMN -PAL Document 29

Filed 11/22/10 Page 10 of 41

I CERTIFICATE OF SERVICE
2 I hereby certify that I am an Employee of

Kolesar & Leatham, Chtd., and that on the 22nd

3 day of November, 2010, I caused to be served a true and correct copy of foregoing ELAN

4 MICROELECTRONICS CORPORATION'S SURRPLY IN OPPOSITION TO
5 DEFENDANT PIXCIR'S REPLY IN SUPPORT OF MOTION TO DISMISS in the
6 following manner:

7

(ELECTRONIC SERVICE) Pursuant to FRCP 5(b)(3) and LR 5-4, the above-referenced

8

document was electronically fied and served upon the paries listed below through the Cour's

9

Case Management and Electronic Case Filing (CM/CF) system:

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W. West Alien
Lewis and Roca, LLP
3993 Howard Hughes Parkway
Suite 600
Las Vegas, NV 89169

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Attorney for Defendant

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Pixcir Microelectronics Corporation
the above-referenced document for

(UITED STATES MAIL) By depositing a copy of

mailing in the United States Mail, first-class postage prepaid, at Las Vegas, Nevada, to the

17

paries listed below at their last-known mailing addresses, on the date above wrtten:

18

Robert E. Krebs, Esq.
Ronald F. Lopez, Esq.
Christopher L. Ogden, Esq.
Nixon Peabody LLP
2 Palo Alto Square
3000 EI Camino Real
Suite 500
Palo Alto, California 94306-2106

19

20
21

22

Kenneth D' Alessandro, Esq.

Lewis and Roca, LLP
3993 Howard Hughes Parkway
Suite 600
Las Vegas, Nevada 89169

Attorney for Defendant

Pixcir Microelectronics Corporation

Attorneys for Defendant
23

Pixcir Microelectronics Corporation

24
25
26

mployee, KOLESAR & LEATHAM, CHTD.

27
28
835539.DOC (7735-2)

PagelOoflO