Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1136

SUR-REPLY to Reply to Response to Motion re 1118 Opposed MOTION for Discovery Motion for Leave to Serve Discovery on Apple, Inc., Patrick Heynen and Los Alamos National Laboratory filed by Eolas Technologies Incorporated, The Regents of the University of California. (Attachments: # 1 Exhibit 4)(McKool, Mike)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
Eolas Technologies Incorporated,
§
§
Plaintiff,
§
Civil Action No. 6:09-cv-446
§
§
vs.
§
§
Adobe Systems Inc., Amazon.com, Inc.,
§
JURY TRIAL
Apple Inc., Blockbuster Inc., CDW Corp.,
§
Citigroup Inc., eBay Inc., Frito-Lay, Inc.,
§
The Go Daddy Group, Inc., Google Inc.,
§
J.C. Penney Company, Inc., JPMorgan
§
Chase & Co., New Frontier Media, Inc.,
§
Office Depot, Inc., Perot Systems Corp.,
§
Playboy Enterprises International, Inc.,
§
Rent-A-Center, Inc., Staples, Inc., Sun
§
Microsystems Inc., Texas Instruments
§
Inc., Yahoo! Inc., and YouTube, LLC
§
§
Defendants.
§

PLAINTIFFS’ SUR-REPLY IN OPPOSITION TO DEFENDANTS’ MOTION FOR
LEAVE TO SERVE DISCOVERY ON APPLE WHICH DENIES PLAINTIFFS THE
RECIPROCAL RIGHT TO SERVE CERTAIN DISCOVERY ON APPLE [DKT. 1118]

McKool 405203v1

Defendants have offered an array of potential explanations for the belated timing of their
motion for leave to serve discovery on Apple, Inc., Patrick Heynen, and Los Alamos National
Laboratory (“Motion”), but none of the offered explanations demonstrate the diligence required
to establish good cause for amending the scheduling order. Moreover, with only a week to go
before the first Pretrial Task deadlines and with expert discovery underway, granting Defendants
the requested leave will introduce a substantial risk of prejudice to Plaintiffs. Nevertheless,
Plaintiffs attempted to avoid motion practice if Defendants would not oppose Plaintiffs’ to seek
their own limited discovery from Apple—a request Defendants refused. For these reasons, the
Court should deny Defendants’ Motion.1 If the Court grants Defendants’ Motion, Plaintiffs ask
that the Court condition such grant on Plaintiffs being able to serve reciprocal discovery from
Apple.
I.

DEFENDANTS PROVIDE NO EXPLANATION FOR THEIR DELAY
Defendants’ delay in filing their motion cannot be explained by Eolas’ settlement

agreement with Apple or the non-cooperation clause included therein. That agreement, as
Defendants’ admit in their Reply, was produced on August 4, 2011. Having been produced over
four months ago, the agreement cannot explain why Defendants are only now seeking leave.
Furthermore, Defendants’ claim that Plaintiffs “engineered” this situation rings hollow.
That Defendants—perhaps unwisely—relied on Apple alone to develop a portion of their
invalidity case was unknown to Plaintiffs and is neither Plaintiffs’ fault nor their responsibility.
Irrespective of the wisdom in allowing Apple to develop the facts to prove a portion of
Defendants’ invalidity case, Defendants should have requested leave as soon as they became
aware of Apple’s dismissal from the case. Cf. Sky Techs. LLC v. SAP AG, 2008 U.S. Dist LEXIS
1

As explained in their Response, Plaintiffs do not oppose the Defendants’ request for an
authentication deposition of LANL regarding production materials [LANL92] and [LANL93],
but they oppose all other requested relief.
1
McKool 405203v1

121488 at *9 (E.D. Tex. June 18, 2008) (granting leave when a defendant re-filed a subpoena on
the same day it learned that its co-defendant had settled). In addition, Defendants’ reliance on
Apple is no excuse as any non-privileged materials in Apple’s possession regarding the
Defendants’ prior art references should have been produced by Defendants long ago.
Defendants’ delay is also not explained by the substance or timing of Christopher
McRae’s deposition. Unlike the case Defendants cite for support, the requested subpoenas here
do not represent obvious follow-up discovery that was unforeseeable prior to testimony provided
in a recent deposition.2 Defendants should have known, long before Mr. McRae’s deposition,
that source code for prior art—if proven to corroborate their arguments—would have benefited
their invalidity defense. Indeed, Defendants’ contention that Plaintiffs’ argument during Mr.
McRae’s deposition was “irrelevant” undercuts any purported need to collect follow-up
discovery to rebut such an argument. If the questioning were truly “irrelevant,” Defendants have
no legitimate need for follow-up discovery.3 Furthermore, Defendants fail to adequately explain
the more-than-ten-weeks it took for them to request leave from the Court to seek the discovery.
In fact, the timing of Defendants’ Motion is best explained by the reality that it wasn’t
until after discovery closed that Defendants endeavored to look for this information. Defendants
admit that their former co-defendant did not thoroughly search the files of its own employees,
2

See Hall v. Pop Rests., L.L.C., 2006 U.S. Dist LEXIS 8143, at *3-4 (N.D. Tex. March 2, 2006)
(finding good cause had been demonstrated to serve subpoenas to the Amarillo Police
Department and the TDCJ-Institutional Division after a witness lied about his criminal record at
his deposition).
3

Importantly, the argument made by Plaintiffs’ counsel during Mr. McRae’s deposition was
offered in response to Defendants’ efforts to establish inequitable conduct. That a retired
professor from Cornell University who was previously unknown to any of the inventors worked
to port MediaView to a non-NeXT OS, without any indication that the inventors knew, is totally
irrelevant to inequitable conduct. Even more, that the same retired professor happened to know
another individual who in turn happened to know of Mr. Heynen’s alleged possession of source
code, which Defendants presumably intend to use to corroborate an invalidity argument, has
even less of a relationship to Mr. McRae’s testimony. See Exhibit 4 to Defs.’ Reply.
2

McKool 405203v1

and they further admit that until recently they had delegated full responsibility for gathering
relevant discovery to that same co-defendant. Defs.’ Reply at 1-2. Contrary to Defendants’
assertions, Plaintiffs could not have possibly manufactured the set of circumstances Defendants’
now find themselves in. If anyone was in a position to understand the state of Apple’s diligence
during discovery, it was not Plaintiffs; it was Apple’s co-defendants. And by relying on another
party to investigate and develop part of their own case, Defendants took a calculated risk that
Apple might fail to exercise the same level of diligence as any one of them would have.
Moreover Defendants’ claim that they lacked knowledge of Mr. Henyen until after Mr.
McRae’s deposition strains credibility. Mr. Heynen is listed as a co-author on a 1992 paper
authored by Defendants’ invalidity expert Dr. Richard Phillips. This 1992 paper was produced
by Adobe—not Apple—and is cited in Dr. Phillips’ July 20, 2011 invalidity report addressing
the alleged MediaView prior art. See Exhibit 4 (Exhibit [Phillips92] to Dr. Phillips’ Expert
Report on Invalidity). Defendants have clearly known of Mr. Heynen for sometime—and had
reason to investigate his alleged relevance long ago.
Even if Defendants’ assertion that they did not appreciate the need to take the discovery
they now seek was believable, Defendants nonetheless failed to exhibit reasonable diligence in
their efforts to obtain it. According to their Reply, Defendants located Mr. Heynen on October
12, 2011, but waited two full weeks, until October 26, 2011 (well-after the close of discovery on
August 12), to serve a subpoena. Defs.’ Reply at 2-3 n.4. It then took Defendants another two
weeks, after multiple inquiries by Plaintiffs, to come to the conclusion that leave from the Court
would be required to serve a subpoena after the close of discovery. See Exhibit 1 to Plaintiffs’
Response. And once Defendants did admit that their outstanding subpoena was unenforceable

3
McKool 405203v1

and that leave would be required, it took them an additional three weeks to file this motion.4 Id.
To summarize, none of the explanations that Defendants have proffered evidence the kind of
diligence needed to show good cause for amending the scheduling order. See S&W Enters. v.
Southtrust Bank of Ala., 315 F.3d 533, 535 (5th Cir. 2003) (citing 6A Charles Alan Wright et al.,
Federal Practice and Procedure § 1522.1 (2nd ed. 1990)).
II.

GRANTING DEFENDANTS’ MOTION WOULD PREJUDICE PLAINTIFFS
Granting this Motion could substantially prejudice Plaintiffs. First, it is possible that the

requested discovery would uncover a need for Plaintiffs to conduct follow-up discovery. For
example, in addition to scheduling the deposition of Patrick Heynen, Plaintiffs may need to
depose and request documents from the two additional individuals who helped lead Defendants
to Mr. Heynen.5 Furthermore, even though the deadline for Defendants’ invalidity report was in
July, the introduction of new evidence regarding prior art may require the supplementation of
expert reports. Plaintiffs’ expert Dr. David Martin is scheduled for three days of deposition on
December 20-22, 2011; if either Plaintiffs or Defendants supplement their validity reports in
light of the discovery Defendants now seek, Defendants may seek to depose him again.

4

During those three weeks, Defendants ignored multiple requests by Plaintiffs to inform Apple
that it need not respond to their unenforceable subpoena. Courts have issued sanctions on parties
for serving untimely third-party subpoenas without leave of court. See Mid-Atlantic
Constructors, Inc. v. Stone & Webster Constr., Inc., 231 F.R.D. 465 (E.D. Pa. 2005) (granting
motion for sanctions against party who served third-party subpoena after discovery deadline); see
also Mick Haig Prods., e.K. v. Does, 2011 U.S. Dist. LEXIS 128366 (N.D. Tex. Sept. 9, 2011)
(party “grossly abused his subpoena power” by serving subpoenas without leave before Rule 26
conference).
5

Defendants explain in their Reply that they located Mr. Heynen by talking first to a Dr. Donald
Greenberg, who lead them to a Dr. James Ferwerda, who in turn referred them to Mr. Heynen.
Drs. Greenberg and Ferwerda may have information relevant to this case, and—depending on
Mr. Heynen’s possible production and deposition testimony—Plaintiffs may need to seek followup discovery from them.
4

McKool 405203v1

Additionally, there is no set date for any of the requested discovery. The availability of
the requested witnesses has not been determined and the timing of document productions and
inspections is uncertain. Jury selection is set in this case for early February. The parties should
not be taking depositions in California while picking a jury in Texas. In short, the Court and the
parties are aware of the current landscape, but granting Defendants’ request could open a
Pandora’s Box of new expert and fact discovery only a few weeks before trial is set.
III.

IF THE COURT GRANTS DEFENDANTS’ MOTION, THEN PLAINTIFFS
SHOULD BE GRANTED A RECIPROCAL RIGHT TO SERVE DISCOVERY
Defendants’ serious charge against Plaintiffs of engaging in “gamesmanship” is not well

received. Plaintiffs were not playing games; they were reaching out to Defendants to seek a
compromise and avoid motion practice. Plaintiffs, like Defendants, lost access to certain
materials when Apple was dismissed from this case. Instead of serving an invalid subpoena in
violation of the Court’s discovery order (a sanctionable abuse of an attorney’s subpoena power),
Plaintiffs complied with the Court’s orders by destroying relevant documents. The compromise
which Plaintiffs offered Defendants was simple: if Defendants wished to receive discovery from
Apple, Plaintiffs also wanted to regain access to documents lost through the settlement.
The re-production of the documents sought by Plaintiffs would cause no prejudice to
Defendants. Unlike the discovery sought by Defendants, there is no need to schedule depositions
or inspections, no danger of any follow-up fact or expert discovery, and no time would be
required for the parties to digest new information contained in the production. All parties to this
case have been aware of the material Plaintiffs seek for months if not years.
IV.

CONCLUSION
For the foregoing reasons, Eolas respectfully requests that the Court deny Defendants’

motion, with the exception of the authentication of [LANL92] and [LANL93] that Defendants
seek from LANL.
5
McKool 405203v1

Dated: December 14, 2011.

MCKOOL SMITH, P.C.
/s/ Mike McKool
Mike McKool
Lead Attorney
Texas State Bar No. 13732100
[e-mail]
Douglas Cawley
Texas State Bar No. 04035500
[e-mail]
Holly Engelmann
Texas State Bar No. 24040865
[e-mail]
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: [phone]
Telecopier: [phone]
Kevin L. Burgess
Texas State Bar No. 24006927
[e-mail]
Josh W. Budwin
Texas State Bar No. 24050347
[e-mail]
Gretchen K. Curran
Texas State Bar No. 24055979
[e-mail]
Matthew B. Rappaport
Texas State Bar No. 24070472
[e-mail]
J.R. Johnson
Texas State Bar No. 24070000
[e-mail]
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: [phone]
Telecopier: [phone]

McKool 405203v1

Robert M. Parker
Texas State Bar No. 15498000
[e-mail]
Robert Christopher Bunt
Texas Bar No. 00787165
[e-mail]
Andrew T. Gorham
Texas State Bar No. 24012715
[e-mail]
PARKER, BUNT & AINSWORTH, P.C.
100 E. Ferguson, Suite 1114
Tyler, Texas 75702
[phone]
[phone]- Facsimile
ATTORNEYS FOR PLAINTIFF
EOLAS TECHNOLOGIES INC.
AND THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA

McKool 405203v1

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a). As such, this document was served on all counsel who
have consented to electronic service. Local Rule CV-5(a)(3)(A) on this December 14, 2011.

/s/ John B. Campbell
John B. Campbell

McKool 405203v1