Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 1 of 12 Page ID #:622
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`SOUTHERN DIVISION
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`
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`DOCUMENT SECURITY
`SYSTEMS, INC.,
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`
`
`
`
`
`v.
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`CREE, INC.,
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`
`
`Plaintiff,
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`Defendant.
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`Civil Action No. 2:17-cv-04263-JVS-JCG
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`JOINT RULE 26(F) REPORT
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`Scheduling Conference:
`October 16, 2017 at 11:30 a.m.
`Courtroom 10C
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`Before: The Hon. James V. Selna
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`
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`
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`Pursuant to Rule 26(f) of the Federal Rules of Civil Procedure, Local Rule 26-
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`1, and the Court's August 25, 2017 Order Setting Rule 26(f) Scheduling Conference
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`(Dkt. 22), Plaintiff Document Security Systems, Inc. (“DSS” or “Plaintiff”) and
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`Defendant Cree, Inc. (“Cree” or “Defendant”) (collectively “the Parties”), by and
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`through their respective counsel of record, conferred, starting on September 25,
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`2017, and discussed the various procedural and substantive matters pertinent to the
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`instant litigation and hereby jointly submit this Joint Rule 26(f) Report. The Parties
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`further note that substantially similar Joint Rule 26(f) Reports have also been
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`submitted in each of the other related cases scheduled for a concurrent Case
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`Management Conference on October 16, 2017.1
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`1 Those other cases are as follows (the “Related Cases”):
`Case No. 8:17-cv-00981-JVS-JCG, DSS v. Seoul Semiconductor Co., Ltd. et al;
`Case No. 2:17-cv-05184-JVS-JCG, DSS v. OSRAM GmbH. et al; and
`Case No. 2:17-cv-06050-JVS-JCG, DSS v. LITE-ON, INC. et al.
`DSS proposed that the parties to these cases file a consolidated Rule 26(f) report, but some
`Defendants requested the submission of separate reports. DSS notes that Case No. 2:17-cv-
`04273-JVS-JCG, DSS v. Everlight Electronics Co., Ltd. et al, is also a related case, but that the
`Court has set that case for a different Case Management Conference date of December 18, 2017.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 2 of 12 Page ID #:623
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`I.
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`SYNOPSIS
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`Plaintiff’s statement: This is a patent litigation action. On July 13, 2017, DSS
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`filed a complaint against Defendant alleging infringement of U.S. Patent Nos.
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`6,949,771 (the “’771 patent”), 7,524,087 (the “’087 patent”), 7,256,486 (“the ’486
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`patent”) and 7,919,787 (“the ’787 patent”) (collectively, the “patents-in-suit”). The
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`patents-in-suit are assigned to DSS, a global leader in brand protection, digital
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`security solutions and anti-counterfeiting technologies.
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`The patents-in-suit claim technologies used in Light-Emitting Diode (“LED”)
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`lighting products. For example, the ’771 patent is directed to “a light source suitable
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`for surface mounting onto a printed circuit board” with the light source including “a
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`planar substrate with a centrally positioned aperture.” (Abstract, ’771 patent). The
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`’087 patent is directed to “a lead frame with a plurality of leads and a reflector
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`housing formed around the lead frame.” (Abstract, ’087 patent). The ’486 patent is
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`directed to “a packaging device [that] includes a substrate, a mounting pad, a
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`connecting pad and an interconnecting element” where the “packaging device has a
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`volume that is only a few times that of the semiconductor die and can be fabricated
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`from materials that can withstand high-temperature die attach processes.” (Abstract,
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`’486 patent). Finally, the ’787 patent is directed to a “semiconductor device.”
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`DSS has asserted that various of Defendant’s LED products infringe the
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`patents-in-suit and that Defendant’s infringing products further include light bulbs,
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`displays and fixtures that contain infringing LED components. DSS has asserted
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`that Defendant infringes the patents-in-suit both directly under 35 U.S.C. §271(a)
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`and by inducing others to infringe the patents under 35 U.S.C. §271(b).
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`Defendant’s statement: Defendant Cree, Inc. (“Cree”) is a North Carolina
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`Corporation, headquartered in Durham, North Carolina, which manufactures and
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`sells light emitting diode (“LED”) products in the United States. The patents-at-
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`issue in this matter were acquired from a Korean non-practicing entity based on an
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`171010 DSS-Cree Joint 26(f) Report.docx
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`2
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 3 of 12 Page ID #:624
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`apparent scheme to obtain licensing revenue from various manufacturers of LED
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`products. According to Plaintiff’s SEC filings, this plan has been funded by Brikel
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`Key Investment LP (“BKI”) which has paid six million dollars to cover attorney’s
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`fees for carrying out this scheme. The scheme includes bringing several allegedly
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`related cases each of which including different products and different combinations
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`of patents. Defendant Cree maintains that the infringement allegations made by
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`Plaintiff against it have been inadequately pled, were not appropriately investigated
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`prior to the filing of this suit and are otherwise meritless.
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`II. LEGAL ISSUES
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`This is an action for patent infringement. The principal issues are likely to
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`be as follows:
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`1. Whether Plaintiff has standing to bring suit;
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`2. Whether Defendant has infringed the patents-in-suit in violation of 35
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`U.S.C. §§ 271(a), (b);
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`3. Whether the patents-in-suit meet the conditions for patentability and
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`satisfy all of the requirements set forth in the provisions of 35 U.S.C. §§
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`101, 102, 103, and 112;
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`4. Whether the patents-in-suit are enforceable;
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`5. The proper construction of the asserted claims of the patents-in-suit;
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`6. The amount of damages, if any, under 35 U.S.C. § 284;
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`7. Whether Plaintiff’s alleged damages are limited under 35 U.S.C. §§ 286
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`and/or 287;
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`8. Whether attorneys' fees, costs, or expenses are recoverable under 35
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`U.S.C. §§ 284 and/or 285; and
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`9. Relief, including attorney’s fees and costs, to be awarded to Defendant
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`Cree.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 4 of 12 Page ID #:625
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`III. DAMAGES
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`Plaintiff’s statement: The Defendant does not publicly disclose their revenue
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`or sales for the products accused of infringement by DSS. DSS cannot therefore
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`provide a realistic range of provable damages. At this time, DSS intends to seek
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`damages in the form of a reasonable royalty.
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`Defendant’s statement: Defendant Cree intends to seek attorney’s fees, costs
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`and other sanctions as the Court may determine to be appropriate in the event the
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`patents-in-suit are found not infringed, unenforceable and/or invalid.
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`IV.
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`INSURANCE
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`The Parties are unaware of any insurance coverage relating to the subject
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`matter of this litigation.
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`V. MOTIONS TO ADD PARTIES, AMEND PLEADINGS OR
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`TRANSFER VENUE
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`Plaintiff’s statement: DSS does not currently believe it is likely that it will
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`file a motion to (i) add other parties or claims or (ii) transfer venue. DSS, however,
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`reserves the right to file a motion to add other parties or claims, or amend its
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`pleadings if the need become apparent through discovery or other proceedings.
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`Defendant’s statement: Defendant Cree has filed a motion to transfer venue
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`and that motion has been fully briefed and is scheduled for hearing on October 16,
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`2017. Defendant Cree reserves the right to file a motion to dismiss for lack of
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`Plaintiff’s standing or other issues that may require amendment of the Complaint.
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`VI. DISCOVERY PLAN
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`A. Changes to Disclosures under Rule 26(a)
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`The Parties do not believe that any changes to the disclosures under Rule 26(a)
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`are necessary.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 5 of 12 Page ID #:626
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`B.
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`Subjects on Which Discovery May Be Needed and Whether
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` Discovery Should Be Phased
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`The Parties do not propose phasing discovery.
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`The Parties expect that discovery may be needed on at least the following
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`subjects:
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`• The patents-in-suit;
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`• Defendant's knowledge of the patents-in-suit;
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`• Licensing of the patents-in-suit;
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`• Defendant’s LED products and products incorporating infringing
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`components;
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`• Defendant's development, production, and sales of the relevant
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`products;
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`• Plaintiff’s acquisition of the patents-in-suit, any related commercial
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`activities, and licensing activities and practices;
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`• Plaintiff’s infringement allegations and investigations concerning the
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`same;
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`• Conception, reduction to practice, and prosecution of the patents-in-
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`suit;
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`• Prior art to the patents-in-suit;
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`• Any secondary considerations of non-obviousness;
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`• Expert discovery;
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`• Defendant's patent licensing practices/activities;
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`• Any affirmative defenses ultimately raised by Defendant;
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`• Any counterclaims ultimately raised by Defendant.
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`C. Discovery Conducted So Far
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`The Parties agree to exchange initial disclosures no later than October 30,
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`2017.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 6 of 12 Page ID #:627
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`D. Orders
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`Plaintiff’s position: DSS requests that the Court enter an order coordinating
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`the related cases before this Court for pretrial purposes.
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`Defendant’s position: Cree consents to pretrial coordination of the related
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`cases to the extent that the Court finds it convenient and warranted. However,
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`because the products of the various accused parties are different and Plaintiff
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`asserts different combination of patents against individual parties, Cree maintains
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`that pretrial coordination should be limited and should permit adequate discovery
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`for individual defendants. As reflected in the Section XI (Other Issues) below, the
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`Parties will submit a stipulated Protective Order and a stipulated Order concerning
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`the discovery and production of electronically-stored information (with competing
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`provisions, to the extent agreement is not possible). Cree proposes that this occur
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`by November 6, 2017.
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`E. Changes to Limitations On Discovery
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`1. Interrogatories:
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`Plaintiff’s Proposal: The Parties agree that Plaintiff may serve up to 15
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`common interrogatories on all Defendants, and up to 10 additional individual
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`interrogatories on each Related Defendant Group.2 Defendants may serve up to 15
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`common interrogatories on Plaintiff, and each Related Defendant Group may serve
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`up to 10 additional individual interrogatories on Plaintiff. The Parties further agree
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`that an interrogatory seeking information about each accused product relating to a
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`particular Related Defendant Group should not be counted as having distinct
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`subparts merely because it seeks information relating to multiple products.
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`Defendant’s Proposal: Cree maintains that F.R. Civ. P. 33(a)(1) provides
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`the appropriate numerical limit for interrogatories for each party. The parties agree
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`2 A “Related Defendant Group” means a group of defendants from a single action,
`such as any of the defendants in the Related Cases listed in n.1, page 1 above.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 7 of 12 Page ID #:628
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`that an interrogatory seeking information about each accused product or each
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`patent-in-suit should not be counted as having distinct subparts merely because it
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`seeks information relating to multiple products and/or multiple patents.
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`2. Requests for Admission:
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`Plaintiff’s Proposal: Plaintiff proposes that (i) Plaintiff may serve up to
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`20 common requests for admission on all Defendants, and up to 30 additional
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`individual requests for admission on each Related Defendant Group, and (ii)
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`Defendants may serve up to 20 common requests for admission on Plaintiff, and
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`each Related Defendant Group may serve up to 30 additional individual requests
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`for admission on Plaintiff, with the caveat that these requests for admission are not
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`for the purposes of document authentication. The Parties further agree that there
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`should be a limit of 100 requests for admission for purposes of document
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`authentication.
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`Defendant’s Proposal: Defendant proposes that each may serve 50
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`requests for admission pursuant to F.R. Civ. P. 36 with the caveat that these
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`requests for admission are not for purposes of document authentication. The
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`Parties further agree that there should be a limit of 100 requests for admission for
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`purposes of document authentication.
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`3. Fact Deposition Time:
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`Plaintiff's Proposal: Plaintiff proposes that deposition discovery in the
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`related cases be coordinated so that witnesses are not subjected to multiple separate
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`depositions and that the deposition of any witness deposed by multiple parties be
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`limited to no more than 10 hours of deposition time, unless otherwise agreed by the
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`parties.
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`Defendant’s Proposal: Defendant Cree proposes that deposition discovery
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`related to non-party fact witnesses in the related cases be coordinated so that such
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`non-party fact witnesses are not subjected to multiple separate depositions and that
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 8 of 12 Page ID #:629
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`the deposition of any such witness deposed by multiple parties be limited to no
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`more than 14 hours of deposition time, unless otherwise agreed by the Parties.
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`Unless the Parties otherwise agree, the obligation Lto coordinate deposition
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`discovery in related cases does not apply to corporate designees under F.R. Civ. P.
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`30(b)(6).
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`4. Expert Deposition Time
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`Plaintiff's Proposal: Plaintiff proposes that the deposition of any expert be
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`limited to 7 hours per primary report (e.g., if an expert offers a report on
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`infringement issues and the same expert offers a report on validity issues, then that
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`expert would be subject to 14 hours of deposition.
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`Defendant’s Proposal: Defendant proposes that the deposition of any
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`expert be limited to 10 hours per primary report for the Plaintiff on one hand and
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`for the Defendant that the report addresses on the other hand, (e.g., if an expert
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`offers a report on infringement issues and the same expert offers a report on
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`validity issues, then that expert would be subject to 20 hours of deposition and an
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`expert that offers a report solely on damages will be subject to 10 hours of
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`deposition), plus one hour per patent addressed in each primary report, if the
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`primary report addresses more than one patent-in-suit.
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`F.
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`Proposed Time of Expert Witness Disclosures
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`Please see Exhibit A to this Report.
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`VII. DISPOSITIVE MOTIONS
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`Plaintiff’s Position: DSS reserves the right to file one or more dispositive
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`motions at the appropriate time, but it is premature to identify such motions at this
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`time as Defendant has not identified any defenses to be asserted.
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`Defendant’s Position: Cree reserves the right to file one or more dispositive
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`motions and/or a motion to dismiss at the appropriate time, and at this time expects
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 9 of 12 Page ID #:630
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`that, at a minimum, it will file a motion for summary judgment of non-
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`infringement.
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`VIII. STATEMENT REGARDING SETTLEMENT DISCUSSIONS
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`The Parties have not yet engaged in substantive settlement discussions.
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`The Parties agree to mediation before a private mediator in line with Local
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`Rule 16-15.4, ADR Procedure No. 3.
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`IX. TRIAL
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`The Parties request a jury trial on issues to which a party is entitled to a jury.
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`Plaintiff’s statement: DSS expects to call between 4 and 8 witnesses at each
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`trial and expects each trial will last five to seven days.
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`Defendant’s statement: At this time, Cree’s investigation of the allegations
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`is in its preliminary stages. Nonetheless, while Cree reserves the right to modify
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`its estimate, Cree estimates that it will call 8 to 12 witnesses at trial. Cree further
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`expects that trial should last 10 to 12 days.
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`X. TIMETABLE
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`Please see Exhibit A for the Parties’ respective proposals regarding the
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`Schedule of Pretrial Dates. In addition, please see Exhibit B for the Parties’
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`respective proposals for other dates in the case.
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`XI. OTHER ISSUES
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`DSS does not anticipate that discovery of its information will require foreign
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`discovery or witnesses that do not speak English. DSS understands that discovery
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`from some of the Related Defendant Groups, however, will require foreign
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`discovery and involve witness that may not speak English. In such instances
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`where translation is required, the Parties agree that a deposition not be limited to
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`the 7 hours contemplated as a default by the Federal Rules of Civil Procedure. The
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`parties anticipate submitting a proposed form of Protective Order to the Court
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`providing for the handling of confidential information. The Parties are also
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 10 of 12 Page ID #:631
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`currently meeting and conferring about a proposed ESI order.
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`As proposed above, to streamline discovery and pretrial rulings in the
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`Related Cases, DSS proposes coordinating the Related Cases for pre-trial purposes,
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`and that the contemplated Protective Order and ESI order be entered in all of the
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`related cases.
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`XII. CONFLICTS
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`Plaintiff: DSS does not have a parent corporation and no publicly held
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`corporation owns 10% or more of its stock.
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`Defendant: Defendant Cree states that it does not have a parent corporation
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`and is not a subsidiary or affiliate of any publicly owned corporation. No publicly
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`held corporation owns 10% or more of Cree.
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`XIII. PATENT CASES
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`The Parties propose that the Court conduct a claim construction hearing on a
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`term-by-term basis in accordance with the schedule provided in Exhibits A and B.
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`XIV. MAGISTRATES
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`Respectfully, the Parties do not consent to proceeding in front of a
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`magistrate judge.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 11 of 12 Page ID #:632
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`Dated: October 10, 2017
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`Respectfully submitted,
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`RUSS AUGUST & KABAT
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`By: /s/ Brian Ledahl
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`Brian Ledahl
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`RUSS AUGUST & KABAT
`Brian Ledahl (CA SB No. 186579)
`Neil A. Rubin (CA SB No. 250761)
`Jacob Buczko (CA SB No. 269408)
`RUSS AUGUST & KABAT
`12424 Wilshire Boulevard 12th Floor
`Los Angeles, California 90025
`Telephone: 310-826-7474
`Facsimile: 310-826-6991
`E-mail: bledahl@raklaw.com
`E-mail: nrubin@raklaw.com
`E-mail: jbuczko@raklaw.com
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`Attorneys for Plaintiff,
`Document Security Systems, Inc.
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`JONES DAY
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`By:_/s/___________________
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`
`Jacqueline K. S. Lee
`1755 Embarcadero Road
`Palo Alto, CA 94303
`Telephone: 650.739.3939
`Facsimile: 650.739.3900
`jkslee@jonesday.com
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`Blaney Harper
`51 Louisiana Avenue, N.W.
`Washington, DC 2001-2113
`Telephone: 202.879.3939
`Facsimile: 202.626.1700
`bharper@jonesday.com
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`Attorneys for Defendant
`Cree, Inc.
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`171010 DSS-Cree Joint 26(f) Report.docx
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`Case 2:17-cv-04263-JVS-JCG Document 34 Filed 10/13/17 Page 12 of 12 Page ID #:633
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`ATTESTATION PURSUANT TO CIVIL LOCAL RULE 5.1
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`I hereby attest that each signatory to this document concurs with its filing
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`and this attestation shall serve in lieu of each person’s signature on the document.
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing document was filed
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`electronically in compliance with Local Rule CV-5(a). As such, this document
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`was served on all counsel who have consented to electronic service on the date of
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`filing.
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`/s/ Brian Ledahl ____
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`Brian Ledahl
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`171010 DSS-Cree Joint 26(f) Report.docx
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`12
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