Wireless Recognition Technologies LLC v. A9.com, Inc. et al

Filing 96

Joint MOTION for Protective Order (Entry of) by A9.com, Inc., Amazon.com, Inc., Google, Inc.,, Nokia, Inc., Ricoh Innovations, Inc., Wireless Recognition Technologies LLC. (Attachments: # 1 Exhibit 1-Proposed Protective Order with Competing Proposals, # 2 Exhibit 2-Plaintiff's Proposed Protective Order, # 3 Exhibit 3-Defendants' Proposed Protective Order, # 4 Exhibit 4-Dkt. No. 241 from LTT case, # 5 Exhibit 5-Dkt. No. 169 from LTT case, # 6 Exhibit Dkt. No. 169-1 from LTT case, # 7 Exhibit 7-ST Sales v. Daimler-LEXIS, # 8 Exhibit 8-Yudell Power of Attorney)(Shvodian, Daniel)

EXHIBIT 5

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

LIGHT TRANSFORMATION
TECHNOLOGIES LLC
NO. 2:09-cv-00354-TJW-CE
v.
ANDERSON CUSTOM ELECTRONICS, INC.,
ET AL.

JURY

JOINT SUBMISSION OF COMPETING PROPOSED PROTECTIVE ORDERS
Pursuant to the paragraph 2 of the Court’s Discovery Order, the parties respectfully
submit their competing proposed protective orders and request that the Court enter one of them.
The parties have diligently met and conferred regarding an appropriate protective order
and have agreed to the vast majority of terms. Unfortunately, agreement could not be reached
with regard to paragraphs 9 and 11.

Plaintiff’s proposed protective order is attached as

Exhibit A. Defendants’ proposed protective order is attached as Exhibit B. For the Court’s
convenience, the parties’ competing versions of paragraphs 9 and 11 are shown in Exhibit C.
The parties’ disagreement regarding paragraph 9 relates to whether in-house counsel will
be screened from all RESTRICTED -- ATTORNEYS’ EYES ONLY information (defendants’
position), or rather only from RESTRICTED -- ATTORNEYS’ EYES ONLY information of a
technical nature and not financial information relating to the Accused Instrumentalities
(plaintiff’s position).
The parties’ disagreement regarding paragraph 11 relates to the scope of the patent
prosecution bar. Plaintiff submits that the prosecution bar should apply to the counsel and
experts for both plaintiff and defendants. Defendants submit that the prosecution bar should
apply to only plaintiff’s counsel and experts.
1

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 2 of 12

The parties’ respective positions are set forth below:

Paragraph 9
Plaintiff’s Position Statement:
Plaintiff’s proposed provision is more appropriate because it would allow plaintiff to
disclose financial information to its in-house counsel.

Plaintiff’s in-house counsel has

responsibility for making decisions dealing directly with this litigation, and in-house counsel
assists outside counsel with the case. Disclosure of financial information relating to the Accused
Instrumentalities is necessary and proper to allow plaintiff to make decisions and engage in
meaningful settlement negotiations. Defendants’ proposed provision would significantly hamper
such efforts, as it would allow defendants to shield their financial information regarding the
Accused Instrumentalities from plaintiffs’ in-house attorneys.
Further, defendants’ position represents a substantial and unwarranted departure from this
Court’s standard protective order.

Under the Court’s standard order, Protected Material

designated RESTRICTED -- ATTORNEYS’ EYES ONLY is generally accessible to a party’s
in-house counsel (so long as the in-house counsel “exercise[s] no competitive decision-making
authority on behalf of the client”). In this case, defendants request to exclude plaintiff’s in-house
counsel from accessing all RESTRICTED -- ATTORNEYS’ EYES ONLY material. Defendants
provide no reasonable justification for such a significant departure from the Court’s standard
order.
As the Court is already aware, the “competitive decision-making” test is the standard for
determining whether in-house counsel should see sensitive or confidential information. See, e.g.,
U.S. Steel Corp. v. United States, 730 F.2d 1465 (Fed. Cir. 1984). However, it is not a matter of
dispute that plaintiff is a non-practicing entity.
2

As such, plaintiff does not compete with

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 3 of 12

defendants, and there could be no possible competitive harm from plaintiff’s in-house counsel
seeing financial information for purposes of case supervision and settlement.
Defendants cite to ST Sales Tech Holdings, LLC v. Daimler Chrysler Co., LLC, 2008 WL
5634214, *5 (E.D. Tex. Mar. 14, 2008) for the proposition that plaintiff’s in-house counsel are
competitive decisionmakers. However, ST Sales involved an outside counsel who had worked so
closely with the Plaintiff and its affiliates on patent acquisitions that he was deemed to a
competitive decisionmaker. The court in that case barred that counsel from seeing the other
side’s sensitive information, due to the perceived risk of inadvertent use of the defendants’
technical information during that counsel assistance with his client’s patent acquisition activities.
The disclosure of financial information was not an issue in ST Sales.
It is inconceivable how plaintiff’s in-house counsel in this case could possibly use
defendants’ protected financial information outside of the context of supervising and potentially
settling this litigation.

Further, although technical information may serve as the basis for

company’s products for many years, financial information is much more fleeting, and its utility
decreased as time passes. Finally, since plaintiff and defendants do not compete, there is simply
no basis for barring Plaintiff’s in-house counsel from financial information which has no
usefulness outside of this case.

Defendants’ Statement:
Plaintiff LTT and its parent, Acacia Research Corporation, are in the business of building
patent portfolios and conducting patent litigation to enforce those patents. LTT/Acacia’s inhouse counsel are competitive decision makers, e.g., they are directing this litigation and also are
prosecuting patent applications that later could be used against the Defendants. The Eastern
District of Texas recognizes that even allegedly outside counsel to numerous related patent

3

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 4 of 12

licensing companies—none of which made or sold any products—were competitive decision
makers to defendants whose products are subject to related patent infringement claims. ST Sales
Tech Holdings, LLC v. Daimler Chrysler Co., LLC, 2008 WL 5634214, *5 (E.D. Tex. Mar. 14,
2008).

When a company’s “entire business model with [its] patent-holding companies …

revolves around the acquisition, enforcement (through litigation), and licensing of patents…, it is
difficult to argue that someone such as [a consistent outside counsel], who is so heavily involved
in these aspects of the business, is somehow not a competitive decisionmaker.” Id.
This Court, therefore, requires that disclosure of outside counsel only information “be
limited to in-house counsel who exercise no competitive decision-making authority on behalf of
the client.” LTT/Acacia’s business model means that all of its in-house counsel are competitive
decisionmakers under this standard. Accordingly, there is potential harm to Defendants in
disclosing their confidential financial information to LTT/Acacia’s counsel. Further, there is no
need for LTT/Acacia’s counsel to view such financial information because their outside counsel
will have access, as will their damages expert.
Third parties may also object to disclosure of their confidential information to
LTT/Acacia’s competitive decisionmakers, especially if they are potential targets of
LTT/Acacia’s “acquisition, enforcement (through litigation), and licensing of patents.” ST Sales,
2008 WL 5634214, *5. Under analogous circumstances, the Eastern District has barred in-house
competitive decisionmakers from participating in licensing discussions with third parties.
Microsoft Corp. v. Commonwealth Scientific and Indus. Research Organisation, 2009 WL
440608, *3-4 (E.D. Tex. Feb. 23, 2009). Defendants’ proposal eliminates the risk of seriatim
motions for supplemental protective orders from third parties, which would substantially impede
the progress of this action.

4

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 5 of 12

Imposing these reasonable restrictions on LTT/Acacia’s in-house counsel will have no
effect of LTT/Acacia’s ability to engage in settlement discussions. The parties expect that any
information LTT/Acacia requires to assess settlement proposals will be provided to LTT/Acacia
pursuant to an agreement among the parties and including Acacia.

Paragraph 11
Plaintiff’s Statement:
There is no justification for the defendants to insist upon the imposition of a patent
prosecution bar upon plaintiff, while at the same time refusing to accept a similar prosecution bar
upon themselves. First, general principals of equity support plaintiff’s position—what is good
for the goose is good for the gander.
Second, to the extent that there may be a real need for a prosecution bar to be applied to
plaintiff, 1 that same need would exist with respect to defendants. Third-party Farlight LLC, the
original patent owner from whom plaintiff acquired all substantial rights to the patents-in-suit, is
a manufacturer of LED lighting fixtures. Farlight likely will be required to produce protected
technical information relating to its designs and products. At least several defendants also design
and/or manufacture optical components for LED lighting fixtures, and/or LED lighting fixtures
themselves. In fact, for one example, Farlight and at least one defendant, Dialight Corporation,
are believed to be direct competitors in the field of LED obstruction light fixtures. In another
example, Farlight at one time designed LED light fixtures for airport applications, in direct
competition with defendant ADB Airfield Solutions. Thus, there exists the real potential for a
defendant to misuse Farlight’s protected technical material (intentionally or otherwise) with
1

Plaintiff is not objecting to the application of a prosecution bar against its attorneys and
experts who receive defendants’ HIGHLY SENSITIVE MATERIAL which is of a technical
nature.
5

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 6 of 12

respect to the defendant’s patent prosecution efforts. In addition, there is also a risk that counsel
for defendants could inadvertently misuse the information of a co-defendant, when engaging in
patent prosecution.
Further, the experts in this case will be subject to a prosecution bar, which makes it more
difficult to find experts willing to work on the case. Defendants improperly seek to exempt their
own experts from a prosecution bar while seeking to impose one on Plaintiff’s experts. Again,
there is no possible justification for such one-sided discriminatory treatment against plaintiffs.
Further still, defendants’ proposal for a one-way prosecution bar represents a significant
and unjustified departure from the two-way bar contained in the Court’s standard protective
order. Defendants should have the burden to show some good reason to depart from a two-way
bar, and defendants have not done so.
Finally, to the extent that defendants’ position may implicitly suggest that lawyers who
represent defendants can be trusted not to misuse otherwise protected confidential technical
information in patent prosecution, but lawyers who represent plaintiffs cannot be so trusted,
counsel for plaintiff would take great exception to such an implication.

Defendants’ Statement:
Plaintiff LTT and its parent, Acacia Research Corporation, are in the business of building
patent portfolios and conducting patent litigation to enforce those patents. Accordingly, there is
good cause for a prosecution bar against LTT/Acacia because (a) their counsel are competitive
decision makers, e.g., they are directing this litigation and also are prosecuting patent
applications that later could be used against defendants, and (b) there is potential harm to
defendants in disclosing its confidential information to LTT/Acacia’s counsel, e.g., that
information could later be used to expand the scope of LTT/Acacia’s patent portfolio to cover

6

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 7 of 12

the defendants’ products. See In re Deutsche Bank Trust Company Americas and Total Bank
Solutions, LLC, 2010 WL 2106957 (Fed. Cir. 2010); Wi-Lan, Inc. v. Acer, Inc., 2009 WL
1766143 (E.D. Tex., June 23, 2009).
By contrast, for example, VWGoA is in the business of distributing and selling
Volkswagen brand vehicles in the United States.

VWGoA’s counsel are not competitive

decision makers with respect to LTT/Acacia, nor is there any potential harm to LTT/Acacia in
VWGoA’s counsel viewing any confidential materials.
situated.

The other defendants are similarly

Plaintiff LTT has not met its burden of showing “the requisite clearly defined,

particular, and specific demonstration of the risk of harm” necessary for a prosecution bar
against VWGoA’s counsel. Wi-Lan, 2009 WL 1766143 at *4. LTT’s desire for reciprocity is
insufficient grounds. See id. (denying plaintiff’s request for a reciprocal bar and instead entering
a unilateral prosecution bar against plaintiff’s counsel where no good cause for a bar was shown
against defendants’ counsel).

CONCLUSION
The parties respectfully request that the Court enter an appropriate protective order.

June 21, 2010.

Respectfully submitted,

COLLINS, EDMONDS & POGORZELSKI, PLLC
By: /s/ Henry M. Pogorzelski
Henry M. Pogorzelski
Texas Bar No. 24007852 – LEAD COUNSEL
Michael J. Collins
Texas Bar No. 04614510
John J. Edmonds
Texas Bar No. 00789758
COLLINS, EDMONDS & POGORZELSKI, PLLC
7

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 8 of 12

709 Sabine Street
Houston, Texas 77007
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
ATTORNEYS FOR PLAINTIFF LIGHT
TRANSFORMATION TECHNOLOGIES LLC

PATTON BOGGS LLP
/s/ David G. Henry_______________
David G. Henry, Sr.
Texas State Bar No. 09479355
PATTON BOGGS LLP
2000 McKinney Ave, Suite 1700
Dallas, Texas 75201
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]
ATTORNEY FOR DEFENDANTS AND
COUNTER-PLAINTIFFS DIGI-KEY
CORPORATION AND DIGI-KEY
INTERNATIONAL SALES CORPORATION

MAYER BROWN LLP
By: _/s/Sharon A. Israel_____
Sharon A. Israel
State Bar. No. 00789394
[e-mail]
Trenton L. Menning
State Bar No. 24041473
[e-mail]
Mayer Brown LLP
700 Louisiana Street, Suite 3400
Houston, Texas 77002
[phone]
[phone] (Facsimile)
8

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 9 of 12

Edward D. Johnson
[e-mail]
Mayer Brown LLP
Two Palo Alto Square, Suite 300
Palo Alto, CA 94306-2112
[phone]
[phone] (Facsimile)
ATTORNEYS FOR DEFENDANTS
PHILIPS LUMILEDS LIGHTING COMPANY
AND PHILIPS COLOR KINETICS

TUCKER ELLIS & WEST LLP
By: _/s/ Harry D.Cornett, Jr._____
Harry D.Cornett, Jr.
Tucker Ellis & West LLP
1150 Huntington Building
925 Euclid Avenue
Cleveland, OH 44115-1475
216-696-2618 Direct Dial and Voicemail
216-288-4881 Cell
216-592-5009 Fax
[e-mail]
ATTORNEYS FOR DEFENDANTS
ADB AIRFIELD SOLUTIONS, LLC AND
AIRPORT LIGHTING SYSTEMS, INC.

By: /s/ Susan A.Smith ____
Deron R.Dacus
Texas State Bar No. 00790553
RAMEY&FLOCK, P.C.
100 East Ferguson, Suite500
Tyler, TX 75702
Tel.: [phone]
Fax: [phone]
[e-mail]
Michael J. Lennon
KENYON & KENYON LLP
One Broadway
9

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 10 of 12

New York, NY 10004-1007
Tel.: [phone]
Fax: [phone]
Susan A. Smith
KENYON & KENYON LLP
1500 K Street, NW, Suite 700
Washington, DC 20005-1257
Tel.: [phone]
Fax: [phone]
ATTORNEYS FOR DEFENDANT
VOLKSWAGEN GROUP OF AMERICA, INC.

WALL & TONG, LLP
By: _/s/ Chin (Jimmy) Kim
Kin-Wah Tong (lead counsel)
N.J. Bar No. 046881994
PA Bar No. 74239
Chin (Jimmy) Kim
N.J. Bar No. 016432006
PA Bar No. 203522
WALL & TONG, LLP
595 Shrewsbury Ave.
Shrewsbury, NJ 07702
[phone] (telephone)
[phone] (facsimile)
[e-mail]
[e-mail]

_

ATTORNEYS FOR DEFENDANT
DIALIGHT CORPORATION

FRAEN CORPORATION
By its attorneys,
/s/ Deborah Race
Otis Carroll
State Bar No. 03895700
Deborah Race
State Bar No. 16448700
10

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 11 of 12

Ireland, Carroll & Kelley, P.C.
6101 South Broadway, Suite 500
Tyler, TX 75703
Tel: [phone]
Fax: [phone]
OF COUNSEL
Joseph Shea (Pro Hac Vice)
Michael Carpentier (Pro Hac Vice)
Nutter McClennen & Fish LLP
Seaport West
155 Seaport Boulevard
Boston, MA 02210-2604
[phone]

By: /s/ James David Jordan
James David Jordan
Munsch Hardt Kopf & Harr
3800 Lincoln Plaza
500 North Akard St
Dallas, TX 75201
214/855-7543
Fax: [phone]
Email: [e-mail]
ATTORNEY FOR DEFENDANTS
FUTURE ELECTRONICS CORP. AND
FUTURE ELECTRONICS, INC.
By: /s/ Robert Christopher Bunt
Robert Christopher Bunt
Parker, Bunt & Ainsworth, P.C.
100 East Ferguson, Ste. 1114
Tyler, TX 75702
903/531-3535
Fax: [phone]
Email: [e-mail]
ATTORNEY FOR DEFENDANTS
OSRAM SYLVANIA, INC

By: /s/ Merritt Schnipper

11

Case 2:09-cv-00354-TJW-CE Document 169

Filed 06/22/10 Page 12 of 12

Merritt Schnipper
Downs Rachlin Martin PLLC
28 Vernon Street
P. O. Box 9
Brattleboro, VT 05302
802-258-3070
802-258-4875 (fax)
[e-mail]
ATTORNEY FOR DEFENDANT
LED LIGHTING SUPPLY COMPANY

CERTIFICATE OF SERVICE
I hereby certify that all counsel of record who are deemed to have consented to electronic
service are being served with a copy of this document via the Court’s CM/ECF system per Local
Rule CV-5(a)(3).
June 21, 2010

/s/ Henry Pogorzelski
Henry M. Pogorzelski

12