Personalized User Model LLP v. Google Inc.

Filing 248

REDACTED VERSION of 232 Letter to The Honorable Leonard P. Stark from Jeremy A. Tigan regarding response to Google's letter of March 31, 2011 by Personalized User Model LLP. (Attachments: # 1 Exhibits 1-2)(Tigan, Jeremy)

MoRRIS, NicHoLs, ARsHT
1201

& TuNNELL LLP

NoRTH MARKET STREET

P.O. Box 1347
19899-1347

WILMINGTON, DELAWARE

JEREMY

A.

302 658 9200
302 658 3989 FAX
TIGAN

302 351 9106
302 425 3096 FAx

April1, 2011

jtigan@mnat. com

The Honorable Leonard P. Stark
United States District Court
for the District of Delaware
844 N. King Street
Wilmington, DE 19801
Re:

VIA ELECTRONIC FILING

PUBLIC VERSION
Confidential Version Filed: April 1, 2011
Public Version Filed: April 12, 2011

Personalized User Model, L.L.P. v. Google, Inc., C.A. No. 09-525 (LPS)

Dear Judge Stark:
This letter responds to Google's March 31, 2011 letter (D.I. 229) seeking: (i) the
disclosure of privileged communications among counsel and board members, (ii) the production
of tax returns, and (iii) supplementation of two interrogatory responses. Google's entire
argument regarding the withheld privileged communications is based on Google's mistaken
belief that the withheld documents relate to Phil Black as an investor in Levino but they cannot
be since Mr. Black never was an investor in Levino. The withheld communications relate to
Mr. Black acting solely as a member of the Board of Utopy (where his interests were identical to
Utopy's) and counsel for the Board. As such, these privileged communications are readily
distinguishable from other documents (which have been produced) where Mr. Black's personal
and legal interests were not the same as Utopy's. The documents that Google demands showing
"consideration" for the patents, including tax returns, are irrelevant due to the bifurcation of
damages in this case. Moreover, P.U.M. has provided Google with the information it seeks in
P.U.M.'s response to Request for Admission No. 33 regarding any compensation paid in relation
to the transfer of the patents from Levino to P.U.M. See Ex. 1. Lastly, because the burden on
Google is substantially the same as it is on P.U.M. to review the patents-in-suit and prior art to
answer Interrogatory Nos. 30 and 31, Google's argument to shift that burden to P.U.M. should be
rejected.
Communications and Drafts Among Board Members and Counsel are Privileged. Google
oversimplifies the privilege analysis and misstates key facts. For example, Google is wrong
about the subject matter of the withheld communications. 1 Utopy is the original assignee named

Google also mischaracterizes what Marc Friedman said off the record. Mr. Friedman did
not state "that he would ... fix the problem," but rather stated he would look into the
issue. This is exactly what P.U.M. did. After a further review of all of the log entries at
issue, P.U.M. produced inadvertently logged documents and maintained its privilege
objection with respect to those entries that are privileged.

The Honorable Leonard P. Stark
April 1, 2011
Page 2
on the patents-in-suit.

REDACTED
REDACTED

In December 2005 the patent application issued as U.S. Patent
No. 6,981,040. Shortly after the patent issued, in early 2006, Utopy sold its rights in the patentsin-suit to Levino. Contrary to Google's assertion, Mr. Black was never an investor in Levino. 3
Notably, the executed final versions of all of the corporate documents, which Google now seeks
in draft, have already been produced. P.U.M. withheld only a discrete set of documents that
relate to communications between Utopy (its Board) and counsel seeking legal advice regarding
Utopy's sale of the patents-in-suit to Levino. 4 All of the board members (including Mr. Black)
were acting in concert at the direction of counsel and with a shared common legal interest,
namely, to comply with their legal fiduciary duties and to effect a proper legal transfer of the
patent. That privilege is not waived by the inclusion of attorney Mr. Clulow who also acted in
confidence and in furtherance of that common legal interest. D.R.E. 502(a)(2) ("communication
is 'confidential' if not intended to be disclosed to third persons other than those to whom
disclosure is made in furtherance of the rendition of professional legal services to the client or
those reasonably necessary for the transmission of the communication"); In re Leslie Controls,
Inc. 437 B.R. 493, 497 (Bankr. D. Del. 2010) (privilege "applies where the interests of the
parties are not identical, and it applies even where the parties' interests are adverse in substantial
respects."). Under Delaware law, both the attorney-client privilege and the common interest
doctrine protect these types of communications and drafts.
Documents Relating To Consideration Are Not Relevant To Any Defense. Google wrongly
argues that documents (including the tax returns of P. U.M.' s individual partners) reflecting
consideration paid for the patents-in-suit are relevant to (1) whether the patent assignment was a
valid contract, and (2) commercial success. First, to demonstrate the right to sue for patent
infringement, a patent holder need do no more than produce a written assignment that is filed
with the PTO. Here, P.U.M filed the written patent assignment with the PTO. This alone is
conclusive proof of ownership and standing to sue. Speedplay, Inc. v. Bebop, Inc., 211 F.3d
1245, 1250 (Fed. Cir. 2000) (patentee "must produce a written instrument documenting the
2

REDACTED

P.U.M. also produced other communications
among Utopy, Phil Black and Stefan Clulow, where Mr. Black's legal interest as a
potential investor was not shared by Utopy.
3

Google argues "PUM now claims documents and correspondence exchanged among
individuals acting on behalf of Utopy and Levino with Black and Clulow related to this
REDACTED
transaction are privileged,"
However, this argument is surely based on Google's misconception that Mr. Black was
an investor in Levino.

4

P.U.M. volunteers these documents to the Court for in camera inspection.

The Honorable Leonard P. Stark
April1, 2011
Page 3
transfer"). How much was paid for the patent, by whom and under what circumstances is
immaterial because an "effective voluntary assignment of patent need not be supported by
consideration" See, e.g., Keller v. Bass Pro Shops, Inc., 15 F.3d 122, 125 (8th Cir. 1994).
Second, Google also contends that "consideration" is relevant to secondary considerations of
non-obviousness. It is not surprising that Google has cited no support for this proposition.
Commercial success is demonstrated through sales of the patented products, not a sale of the
patent itself. See In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996) (commercial success inquiries
should ordinarily be directed to product sales flowing from "the unique characteristics of the
REDACTED
claimed invention as opposed to other economic and commercial factors").

Finally, the tax returns of P.U.M.'s individual members are also not discoverable because
Google has not and cannot show "good cause" -- as it must -- to justify disclosure of personal tax
returns. The income of the members of the entity that owns the patents-in-suit is not relevant to
any issue in this case. The request is also premature as its only relevance, if any, would be in
relation to damages which have been bifurcated. Lastly, the information sought has already been
provided or is readily available from other sources, such as deposition testimony or other less
invasive written discovery. Blanchet v Colonial Trust Co., 23 F.R.D. 118, 121 (D. Del. 1958)
("there appears no good cause for the production of income tax returns and these returns will
only be required when circumstances demand them"). Thus, Google's request for tax returns and
other "consideration" documents should be denied.

P.U.M. Should Not be Ordered to Respond to Interrogatory Nos. 30 and 31. Interrogatory
No. 30 asks P.U.M. to (1) identify every mathematical formula needed to enable or practice the
asserted claims of the patents-in-suit, and (2) to compare those formulas to the "prior art."
Because both the patents-in-suit and Google's cited prior art are equally available to both parties,
and the burden of deriving the answer is substantially the same for each party, (i.e., determining
which mathematical formulas disclosed in the patents are needed to enable the invention and
comparing them to the 15 prior art references charted by Google in its invalidity contentions to
determine whether the mathematical formulas are present or not), P.U.M. should not be ordered
to supplement its response to this interrogatory. See Fed. R. Civ. P. 33(d); see also Playboy
Entertainment Group v. US., 1997 U.S. Dist. Lexis 22297, *14 (D. Del. Dec. 10, 1997) ("Where
the burden of ascertaining an answer would be the same for either party, Rule 33(d) places the
research burden on the party seeking the information"). Similarly, with respect to Interrogatory
No. 31, Google asks P.U.M. to identify all of the "machine learning techniques" in the "prior
art," and to determine whether the patents could not be practiced with such techniques. Again,
the burden is the same on both parties to analyze the patents-in-suit and the prior art and make
this analysis. Id Further, as P.U.M. states in its objections, the phrase "machine learning
techniques that existed in the PRIOR ART" is undefined and Google's definition of PRIOR ART
is also objectionable. Google's demand to shift the burden to P.U.M. should be denied.
5

Google again mischaracterizes the facts. P.U.M. never stated the patents-in-suit were a
"gift," but rather a transfer between the same sets of owners.

The Honorable Leonard P. Stark
April 1, 2011
Page 4

Respectfully,

~A(}_.~~v"

Jeremy A.~an
JAT/dla
Enclosures
cc:
Clerk of the Court (by hand, w/encls.)
All Counsel of Record (viae-filing and/or e-mail)

(#5~9)