Tessera, Inc. v. UTAC (Taiwan) Corporaiton
Filing
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ORDER Re: Discovery Dispute Joint Report #12 288 . Signed by Magistrate Judge Howard R. Lloyd on 5/27/2015. (hrllc1, COURT STAFF) (Filed on 5/27/2015)
*E-Filed: May 27, 2015*
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California
NOT FOR CITATION
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United States District Court
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SAN JOSE DIVISION
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TESSERA, INC.,
Plaintiff,
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v.
No. C10-04435 EJD (HRL)
ORDER RE: DISCOVERY DISPUTE
JOINT REPORT #12
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UTAC (TAIWAN) CORPORATION,
[Dkt. No. 288]
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Defendant.
____________________________________/
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Plaintiff Tessera, Inc. (“Tessera”) sues Defendant UTAC (Taiwan) Corporation (“UTC”) for
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alleged failure to pay royalties under a license agreement. The first phase of this action concerned a
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contract interpretation dispute between Tessera and UTC about the criteria for determining which
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UTC products are royalty-bearing. Following discovery on that subject, the parties submitted
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summary judgment motions relating to contract interpretation, which were ruled on by the court.
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In the second phase of this action, Tessera served UTC with infringement disclosures
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identifying the products that Tessera contends are royalty-bearing under the agreement. Tessera’s
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July 8, 2014 disclosures identified 32 claims of 12 licensed patents and provided claim charts
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contending that two types of UTC packages—its w-BGA packages and DFN packages—are
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covered by the claims of licensed patents and are therefore royalty-bearing. Tessera’s disclosure
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asserted that Tessera did not have enough information to determine whether a third type of package,
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UTC’s LGA SiP package, is covered by the claims of the licensed patents and is therefore royalty-
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bearing. UTC disputes Tessera’s contentions, and also served Tessera with invalidity contentions.
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UTC has filed a motion for partial summary judgment, which is currently pending. Dkt.
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Nos. 208, 247. Tessera opposed the motion, and the court has not yet issued a ruling. The parties
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have also briefed and argued claim construction issues, and the court has not yet issued a claim
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construction order.
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Presently before the Court is the parties’ Discovery Dispute Joint Report (“DDJR”) #12.
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Dkt. No. 288. The parties’ dispute relates to the subpoena that Tessera served on UGS America
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Sales Inc. (“UGS America”) on February 18, 2015, which includes 16 document requests and 21
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deposition topics. UGS America provides sales support services in the United States for various
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companies.
For the Northern District of California
United States District Court
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Tessera requests that the Court order UGS America to produce responsive documents to
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each of Tessera’s document requests and designate a witness to testify to each of the deposition
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topics. First, Tessera argues that UGS America’s relationship with UTC is relevant to UTC’s
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assertions about its nexus to the United States. According to Tessera, UTC put at issue how much
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of its business has a nexus to the United States or U.S. companies in its motion for summary
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judgment (Dkt. No. 247), and testing UTC’s assertions requires allowing inquiry about the various
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connections between UTC and UGS America. Second, Tessera argues that the requested discovery
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seeks information relevant to determining the full scope of royalties owed by UTC under the
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agreement. According to Tessera, UTC has improperly limited its disclosures to only those
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products it made and sold exclusively in Taiwan, and UGS America similarly seeks to limit its
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deposition to such products. Third, Tessera argues that discovery regarding UGS America’s
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marketing activities is relevant to UTC’s exploitation of patented technologies that it licensed from
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Tessera in the U.S. market. According to Tessera, UGS America’s marketing materials are relevant
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to determining whether there are offers for sale in the United States for UTC’s products and the
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extent of UTC’s presence in the U.S. market. These materials would also show how the UTC
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products at issue are described to potential customers, which is relevant to both UTC’s use of
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Tessera’s patents and refuting UTC’s contention that the asserted Tessera patents are obvious.
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Fourth, Tessera argues that it seeks information relating to UTC’s involvement in the selling,
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distributing, or marketing of products at issue, which is relevant to testing UGS America’s
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assertions that it is not aware of any UGS America sales of UTC products.
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UTC argues that the subpoena seeks deposition testimony and documents that do not relate
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to this case or concern parties to this case, and that would impose an extraordinary burden on a non-
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party. UTC requests that the subpoena be quashed, or in the alternative, limited to the topic of the
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actual sale of UTC products by UGS America and narrowed to seek only documents in the
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possession of UGS America (and not its corporate affiliates).
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Rule 45 of the Federal Rules of Civil Procedure authorizes the issuance of a subpoena
commanding a non-party to attend and testify; produce designated documents, electronically stored
For the Northern District of California
United States District Court
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information, or tangible things in that non-party’s possession, custody or control; or permit the
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inspection of premises. Fed. R. Civ. P. 45(a)(1)(A)(iii). The scope of discovery through a Fed. R.
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Civ. P. 45 subpoena is the same as that applicable to Fed. R. Civ. P. 34 and the other discovery
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rules. Fed. R. Civ. P. 45 advisory committee’s note (1970).
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Parties may obtain discovery about any nonprivileged matter that is relevant to any party’s
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claim or defense. Fed. R. Civ. P. 26(b)(1). “Relevance under Rule 26(b)(1) is construed more
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broadly for discovery than for trial.” Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207,
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1211 (Fed. Cir. 1987). “Relevant information need not be admissible at the trial if the discovery
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appears reasonably calculated to lead to the discovery of admissible evidence.” Fed. R. Civ. P.
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26(b)(1).
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Discovery is not unfettered, however. A court must limit the extent or frequency of
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discovery if it finds that (a) the discovery sought is unreasonably cumulative or duplicative or can
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be obtained from a source that is more convenient, less burdensome or less expensive; (b) the party
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seeking discovery has had ample opportunity to obtain the information through discovery; or (c) the
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burden or expense of the discovery sought outweighs its likely benefit, considering the needs of the
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case, the amount in controversy, the parties’ resources, the importance of the issues at stake, and the
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importance of the discovery in resolving those issues. Fed. R. Civ. P. 26(b)(2)(C)(i)-(iii).
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Fed. R. Civ. P. 45(d)(3)(B) provides that the court may quash or modify a subpoena if it
requires: “(i) disclosing a trade secret or other confidential research, development, or commercial
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information; or (ii) disclosing an unretained expert’s opinion or information that does not describe
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specific occurrences in dispute and results from the expert’s study that was not requested by a
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party.” Additionally, Fed. R. Civ. P. 45(d)(3) provides that the court must quash or modify a
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subpoena that imposes an undue burden.
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First, in regards to RFPs 2, 5, 9, 15, and 16 as well as Deposition Topics 5, 8, 13, 15, 16, 17,
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19, and 20, Tessera’s subpoena demands documents and deposition testimony about companies
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other than UTC. This demand for discovery concerning parties other than UTC would produce
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irrelevant information. UGS America provides sales services for several companies, all of which
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Tessera includes under the label “UTAC Group.” For instance, included in UTAC Group is United
For the Northern District of California
United States District Court
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Test and Assembly Center Ltd. (“UTAC Singapore”)—UTC’s parent—which has its own license
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with Tessera and is not covered by the agreement at issue here. The other companies included under
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the label “UTAC Group” are not parents or subsidiaries of UTC. These companies are not subject
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to the license agreement between Tessera and UTC, and are irrelevant to the action.
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Second, Tessera’s requests for matters other than UGS America’s sales of UTC products
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would impose an undue burden and produce irrelevant information. In regards to RFPs 1, 2, 4, 5, 6,
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8, 9, 11, 13, 14, and 15 as well as Deposition Topics 1, 2, 5, 7, 8, 9, 10, 12, 13, 15, 16, 17, 18, 19,
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and 20, Tessera’s subpoena demands documents and information that do not concern sales of UTC
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products and therefore have no bearing on this action.
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For example, RFP 4 seeks “all communications” between UGS America and UTC. UTC
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objects to searching for and collecting all communications that might have occurred between UTC
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and UGS America, regardless of what the communications might relate to, because it would be
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burdensome and unjustified. See Convolve, Inc. v. Dell, Inc., No. C10-80071 WHA, 2011 WL
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1766486, at *2 (N.D. Cal. May 9, 2011) (“Requests to non-parties should be narrowly drawn to
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meet specific needs for information.”). However, UTC states that UGS America is willing to
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produce discovery concerning any sales that it made or participated in of products made by UTC.
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Moreover, the subpoena requests financial and marketing information, which is irrelevant to
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determining UTC’s potential royalty obligations under the agreement. As discussed in the Order
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Re: Discovery Dispute Joint Report #11, the royalties owed is calculated based on the number of
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billable pins in certain packages multiplied by the number of such packages sold. Dkt. No. 313, at
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2-3. The profits UTC may earn are irrelevant. Further, marketing activities that do not result in a
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sale cannot trigger the royalty obligation.
In addition, the subpoena seeks to impose on UGS America an obligation to obtain
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identify all expenses, costs, revenues, or profits incurred or received by [UTC] for importations or
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sales of any Packages at Issue.” If this information is provided, it should come from UTC as a party
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to the case. See Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 577 (N.D. Cal. 2007)
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(quashing a non-party subpoena that sought information that was “obtainable from a source more
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For the Northern District of California
information that should come from UTC. For instance, RFP 6 seeks “Documents sufficient to
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United States District Court
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direct, convenient, and less burdensome—namely, from Defendants”). Moreover, RFP 1 requests
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all documents relating to the agreement or Tessera, and Deposition Topic 10 requests a witness to
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testify about “discussions between [UTC] and any other person or entity, relating to the Agreement
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or Tessera, Inc.” among other things. However, UTC is the party to the agreement with Tessera,
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and UTC has already fully provided discovery on these subject. This discovery is not appropriate to
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impose on a non-party.
Accordingly, Tessera’s subpoena is limited to the topic of the actual sale of UTC products
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by UGS America and narrowed to seek only documents in the possession of UGS America (and not
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its corporate affiliates). If UGS America has not already done so, it shall produce all responsive
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documents within fourteen (14) days of the date this order is filed and designate a witness to testify
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to Deposition Topics 1, 2, 5, 7, 10, 12, 13, 16, 17, 18, 19, and 20, 1 as narrowed, at a mutually
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agreeable date shortly following the document production.
IT IS SO ORDERED.
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Dated: May 27, 2015
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HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE
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Deposition Topics 8, 9, and 15 request financial and marketing information. As explained above,
this information is irrelevant to determining UTC’s potential royalty obligations under the
agreement.
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C10-04435 EJD (HRL) Order will be electronically mailed to:
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Anup M Shah
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Benjamin W. Hattenbach
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David H. Herrington
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Dominik B. Slusarczyk
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Jackson Samuel Trugman
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Jacob Johnston
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Joseph Mark Lipner
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Lawrence B. Friedman
ashah@kslaw.com
bhattenbach@irell.com
dherrington@cgsh.com, dherrington@cgsh.com
dslusarczyk@irell.com, mspillner@tessera.com
jtrugman@irell.com
jjohnston@cgsh.com
jlipner@irell.com, csilver@irell.com, hhyun@irell.com, slee@irell.com
lfriedman@cgsh.com, maofiling@cgsh.com
For the Northern District of California
United States District Court
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Michael F. Heafey
mheafey@kslaw.com, rgowins@kslaw.com
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Morgan Chu
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Morvarid Metanat
mmetanat@orrick.com
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Nathaniel E. Jedrey
njedrey@cgsh.com
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Polina Bensman
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Richard William Krebs rkrebs@irell.com, cmedina@irell.com, rbrown@tessera.com,
Slee@irell.com, sveeraraghavan@tessera.com, tegarcia@tessera.com
mchu@irell.com
lbensman@cgsh.com
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Ryan Alexander Ward
rward@irell.com
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Sri Kuehnlenz
skuehnlenz@cgsh.com
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Counsel are responsible for distributing copies of this document to co-counsel who have not
registered for e-filing under the court’s CM/ECF program.
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