Personalized User Model LLP v. Google Inc.

Filing 642

REDACTED VERSION of 626 Reply Brief, in Support of Motion Regarding the Statute of Limitations Applicable to Google's Breach of Contract Defense and Related Counterclaims by Personalized User Model LLP, Konig Yochai. (Murphy, Regina)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PERSONALIZED USER MODEL, L.L.P.,

)
)
Plaintiff,
)
v.
)
)
GOOGLE, INC.,
)
)
Defendant.
) C.A. No. 09-525 (LPS)
)
) REDACTED –
) PUBLIC VERSION
GOOGLE, INC.
)
)
Counterclaimant,
)
v.
)
PERSONALIZED USER MODEL, L.L.P. and )
)
YOCHAI KONIG,
)
Counterclaim-Defendants. )
PUM’S REPLY IN SUPPORT OF ITS MOTION
REGARDING THE STATUTE OF LIMITATIONS APPLICABLE TO
GOOGLE’S BREACH OF CONTRACT DEFENSE AND RELATED COUNTERCLAIM
OF COUNSEL:
Marc S. Friedman
Andrew M. Grodin
DENTONS US LLP
1221 Avenue of the Americas
New York, NY 10020-1089
[phone]
Mark C. Nelson
Richard D. Salgado
DENTONS US LLP
2000 McKinney Avenue, Ste. 1900
Dallas, TX 75201
Jennifer D. Bennett
DENTONS US LLP
1530 Page Mill Road, Ste. 200
Palo Alto, CA 94304-1125
[phone]
Originally Filed: March 6, 2014
Redacted Version Filed: March 11, 2014

MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Karen Jacobs (#2881)
Jeremy A. Tigan (#5239)
Regina Murphy (#5648)
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
[phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Personalized User Model, L.L.P. and
Yochai Konig

TABLE OF CONTENTS
Page
I.

§ 8117 Does Not Apply Here Because It Is Inconsistent with the
Borrowing Statute............................................................................................................ 1

II.

§ 8117 Also Does Not Apply Because Utopy Was Subject to Suit in
Delaware ......................................................................................................................... 2

i

TABLE OF AUTHORITIES
Page(s)
CASES
Bd. of Trustees of Leland Stanford Junior Univ v. Roche Roche Molecular Sys., Inc.,
583 F.3d 832 (Fed. Cir. 2009) ............................................................................................... 3
Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC,
2012 WL 3201139 (Del. Ch. Aug. 07, 2012) ......................................................................... 2
FDIC v. Brossman,
No. Civ.A. 81C-DE-116, 1984 WL 553542 (Del. Super. June 12, 1984)............................... 2
Hurwitch v. Adams,
155 A.2d 591 (Del. 1959) ...................................................................................................... 1
Madison Fund, Inc. v Midland Glass Co.,
No. 394-1974, 1980 WL 332958 (Del. Super. Ct. Aug. 11, 1980) .......................................... 3
McCorriston v. L.W.T., Inc.,
536 F. Supp. 2d 1268 (M.D. Fla. 2008) ................................................................................. 1

RULES AND STATUTES
10 Del. C. § 8106 .................................................................................................................... 1, 3
10 Del. C. § 8117 ............................................................................................................... Passim
10 Del. C. § 8121 ............................................................................................................... Passim

ii

Google does not address the central premise of PUM’s argument, namely that applying
§ 8117 in the circumstances here would defeat the purpose of the Delaware borrowing statute.
Indeed, Google does not even contest that it seeks to avail itself of a longer limitations period in
Delaware based on § 8117. Google also raises a strawman, arguing that it is not forum shopping
because it filed a counterclaim to PUM’s infringement action. But this ignores that the focus is
not on whether Google could have sued PUM in California, but whether Google’s predecessor,
SRI – in whose shoes Google stands – could have sued PUM’s predecessor, Utopy, in Delaware
had it had any reason to do so. The issue of whether § 8117 applies is an issue solely for the
Court and is dispositive in the circumstances here because SRI’s stale claims otherwise expired
long ago.1 To the extent the Court finds there are any factual issues remaining for the jury,
however, the jury should be instructed that it is § 8121, and its application of § 8106, that applies
to this dispute, and not § 8117. Instructing the jury on both statutes would provide inconsistent
standards and be confusing to the jury.
I.

§ 8117 Does Not Apply Here Because It Is Inconsistent with the Borrowing Statute
The Delaware borrowing statute applies here to bar Google’s claim because Google seeks

to avail itself of a longer limitations period in Delaware pursuant to § 8117. Google fails to rebut
that applying § 8117 here, unlike in Saudi Basic, would defeat the purpose of the borrowing
statute. It also would “result in the abolition of the defense of statutes of limitation in actions
involving non-residents.” Hurwitch, 155 A.2d 593-94. 2 Indeed, Google has no answer to the
fact that, were § 8117 interpreted as Google proposes, any defendant could become subject to a
1

Google accuses PUM of seeking summary judgment. In its Order denying Google’s Motion
for Reconsideration, however, the Court expressly stated that “to the extent there are factual
disputes” they would be tried to the jury. See Mem. Order, D.I. 537 at 4. When the proper
statute of limitations is applied, there are no issues of fact to be decided.
2

Google tries to limit Hurwitch to the facts of the case and characterizes it as being about
substitute service. Its holding, as set forth above, is not so limited, however. Likewise,
Brossman, which Google also cites, does not address whether tolling should be applied where it
is inconsistent with the borrowing statute and where the action arose outside Delaware. 1984
WL 553542, at *2 (Del. Super. June 1, 1984).

1

host of stale claims arising elsewhere simply by entering the State. D.I. 610 at 6. As the case
Google cites makes clear, stretching § 8117 to apply to actions that could have been brought
against a defendant in the state where the action arose would be “an absurd result.”
McCorriston, 536 F. Supp. 2d at 1276. Google argues that the borrowing statute somehow does
not apply because its cause of action in California was allegedly tolled until discovery in this
lawsuit. That assertion is wrong because its claims have otherwise expired under both California
and Delaware law.3 That is why Google seeks the benefit of § 8117 and why the borrowing
statute and Delaware’s three year statute of limitations must apply. 4
II.

§ 8117 Also Does Not Apply Because Utopy Was Subject to Suit in Delaware
SRI could have brought suit against Utopy and gained complete relief for its ownership

claim at any time after the inventors assigned their rights in the patents to Utopy in June 2000.
D.I. 454 Ex. M. The only relief Google seeks – and the only compulsory counterclaim Google
argues it has – is for co-ownership of the patents-in-suit. D.I. 620 at 7-8; D.I. 180 at 18. As of
June 2000, Utopy owned the patents. Utopy continued to own the patents for six years, all the
3

Google misapplies the inherently unknowable standard to say that the statute was tolled in
Delaware or California by arguing that, without litigation, the date of conception was inherently
unknowable to SRI, and only when SRI discovered that date and therefore its injury did the
statute begin to run. But this is not the law. The discovery rule is a “narrowly confined
exception,” that only tolls the statute until the plaintiff is on inquiry notice of the existence of
facts “which, if pursued, would lead to the discovery [of injury].” Cent. Mortg., WL 2012 WL
3201139, at *22. The wrong could not be inherently unknowable because SRI had actual notice
of the invention in 2001-02 when SRI’s Dr. Somnez was a beta-test user, and constructive notice
in December 2005 when the ’040 patent issued listing on its face a December 1999 filing date –
four months after Dr. Konig left SRI --which would have put SRI on inquiry notice had it
thought it had any claim.
Even if Google were right that its clam did not expire in California, which it is not, then
Delaware’s borrowing statute would mandate that Delaware’s shorter statute of limitations apply.
Google cannot both invoke Delaware’s nonresident tolling statute and tolling under California
law to cherry pick favorable aspects of each state’s law to resuscitate its stale claim.
4

If Google is permitted to argue to the jury that Dr. Konig’s invention is related to SRI’s
business, and yet SRI’s cause of action was inherently unknowable, then PUM should be allowed
to rebut that argument by telling the jury that those actually in the relevant field, including
Google, had notice of Dr. Konig’s patent, for example, through the rejection of Google’s patent
application in light of Dr. Konig’s patent.
2

while amenable to suit in Delaware as a Delaware corporation. 10 Del. C. § 3111. Thus, since
June 2000, such relief was only available, if at all, from Utopy and its assigns (including PUM);
Dr. Konig himself had nothing left to assign. See Roche, 583 F.3d at 842 (prior assignment of
patent rights by inventor left him with nothing left to assign). As Google admits, § 8117 only
tolls the statute for defendants that are not subject to service in Delaware. See D.I. 620 at 7; 9
Thus, § 8117 does not apply to Google’s case against PUM, Utopy’s assignee. Time-barred
claims cannot be revived by the assignment of those claims to a new owner. Madison Fund,
1980 WL 332958 (Del. Super. Ct. Aug. 11, 1980).
In addition, Google is wrong that Dr. Konig is a necessary party who was not amenable
to service prior to this lawsuit.5 D.I. 620 at 10. SRI could have sought ownership relief from
Utopy without suing Dr. Konig for breach of contract. Although Dr. Konig may have been a
witness, he would not be an indispensable party to SRI’s claim because SRI could obtain
ownership relief only from Utopy, not Dr. Konig, who had no patent rights left to assign. 6
CONCLUSION
Google cannot rely on the longer limitations period of § 8117 to revive its stale claims
because to do so would defeat the purpose of the borrowing statute. Section 8117 also does not
apply because Google cannot demonstrate unavailability. Therefore, to the extent the Court
finds that factual disputes remain, the jury should be instructed on § 8121 and its application of
§ 8106 and not § 8117.

5

Google is also wrong that Dr. Konig became amenable to suit in Delaware as PUM’s
“representative” when PUM brought suit against Google in Delaware. D.I. 486 at 6-8; D.I. 620 at
7. But to the extent Dr. Konig became available with the filing of this lawsuit, he was equally
available as an officer of Utopy.
6

Google misses the point by saying that there is no reason to think Dr. Konig would have
consented to suit had SRI sued Utopy in Delaware to avoid multiple actions, “before this
lawsuit.” D.I. 620 at 10 n.3. This lawsuit is not the relevant focus. SRI could have sued
Dr. Konig in California prior to the expiration of its breach of contract claim there, and at the
same time brought suit against Utopy in Delaware for a declaration of co-ownership, and it is
just as likely Dr. Konig would have consented to join the Delaware action then as he has now.
3

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

/s/ Regina Murphy

OF COUNSEL:
Marc S. Friedman
Andrew Grodin
SNR Denton US LLP
1221 Avenue of the Americas
New York, NY 10020-1089
[phone]

_________________________________________
Karen Jacobs (#2881)
Jeremy A. Tigan (#5239)
Regina Murphy (#5648)
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
[phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Personalized User Model, L.L.P. and
Yochai Konig

Mark C. Nelson
Richard Salgado
SNR Denton US LLP
2000 McKinney Avenue, Ste. 1900
Dallas, TX 75201
[phone]
Jennifer D. Bennett
SNR Denton US LLP
1530 Page Mill Road, Ste. 200
Palo Alto, CA 94304-1125
[phone]
March 6, 2014
8065254.3

4

CERTIFICATE OF SERVICE
I hereby certify that on March 11, 2014, I caused the foregoing to be
electronically filed with the Clerk of the Court using CM/ECF which will send electronic
notification of such filing to all registered participants.
Additionally, I hereby certify that true and correct copies of the foregoing were
caused to be served on March 11, 2014, upon the following individuals in the manner indicated:
BY E-MAIL

BY E-MAIL

Richard L. Horwitz
David E. Moore
POTTER ANDERSON & CORROON LLP
1313 N. Market St., 6th Floor
Wilmington, DE 19801

Brian C. Cannon
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Dr., 5th Floor
Redwood Shores, CA 94065
Charles K. Verhoeven
David A. Perlson
Antonio R. Sistos
Andrea Pallios Roberts
Joshua Lee Sohn
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California Street, 22nd Floor
San Francisco, CA 94111

/s/ Regina Murphy
___________________________
Regina Murphy (#5648)