Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 1 of 25
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`IRELL & MANELLA LLP
`Morgan Chu (70446)
`MChu@irell.com
`Benjamin W. Hattenbach (186455)
`BHattenbach@irell.com
`C. Maclain Wells (221609)
`MWells@irell.com
`1800 Avenue of the Stars, Suite 900
`Los Angeles, California 90067-4276
`Telephone: (310) 277-1010
`Facsimile:
`(310) 203-7199
`
`
`Attorneys for Defendant
`DEMARAY LLC
`
`YAR R. CHAIKOVSKY (SB# 175421)
`yarchaikovsky@paulhastings.com
`PHILIP OU (SB# 259896)
`philipou@paulhastings.com
`JOSEPH J. RUMPLER, II (SB# 296941)
`josephrumpler@paulhastings.com
`DAVID OKANO (SB#278485)
`davidokano@paulhastings.com
`ANDY LEGOLVAN (SB# 292520)
`andylegolvan@paulhastings.com
`BORIS LUBARSKY (SB# 324896)
`borislubarsky@paulhastings.com
`PAUL HASTINGS LLP
`1117 S. California Avenue
`Palo Alto, California 94304-1106
`Telephone: 1(650) 320-1800
`Facsimile: 1(650) 320-1900
`
`MATTHIAS KAMBER (SB#232147)
`matthiaskamber@paulhastings.com
`PAUL HASTINGS LLP
`101 California Street, 48th Floor
`San Francisco, California 94111
`Telephone: 1(415) 856-7000
`Facsimile: 1(415)856-7100
`
`Attorneys for Plaintiff
`APPLIED MATERIALS, INC.
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`APPLIED MATERIALS, INC.,
`Plaintiff,
`
`vs.
`DEMARAY LLC,
`Defendant.
`
`CASE NO. 5:20-cv-09341-EJD
`THIRD UPDATED CASE
`MANAGEMENT STATEMENT
`PURSUANT TO ORDER [DKT. NO.
`101]
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`THIRD UPDATED JOINT CASE
`MANAGEMENT STATEMENT PURUSANT
`TO ORDER [DKT. NO. 101]
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 2 of 25
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`Plaintiff Applied Materials, Inc. (“Applied”) and Defendant Demaray LLC (“Demaray”)
`(collectively, “the Parties”) submit this Updated Joint CMC Statement pursuant to the Court’s
`December 15, 2021 Order, Dkt. No. 101, ordering the Parties to confer and file an updated joint
`case management statement with a proposed case schedule by December 22, 2021, setting forth
`their case management proposal(s) for Judge Davila. The Parties further incorporate by reference
`their prior Case Management Statements submitted on November 4, 2021, Dkt. No. 82, October
`6, 2021, Dkt. No. 69, and January 14, 2021, Dkt. No. 27, and, where appropriate for brevity, note
`below where their positions have not changed.
`A. Applied’s Position:
`Applied objects to Demaray’s lengthy and repeated arguments regarding its need for
`additional discovery from Applied and indecision as to whether it will assert infringement claims
`in the future. Noting this Court’s standing order on Case Management Statements that “except in
`unusually complex cases, [the statement] should not exceed ten pages,” Applied proposed the
`parties limit their respective positions in “Disputed” Section to no more than 5 pages. Demaray
`refused, insisting on submitting its 10 pages of argument in the “Disputed” Sections below. As
`explained herein, Demaray has waived any compulsory counterclaims of infringement.
`Moreover, the case management statement is not a proper document to raise purported discovery
`disputes or present arguments on a yet-to-be-filed motion to amend its answer to assert
`infringement claims. Applied would oppose any such motion, and does not believe Demaray
`would have good cause to add infringement claims later in the case.
`B. Demaray’s Position:
`Magistrate Judge Cousins ordered an updated CMC statement from the Parties. Dkt. No.
`101. Consistent with the Civil Local Rules and the Court’s Standing Orders, Demaray has
`endeavored herein to outline for the Court the issues between the Parties related thereto, including
`potential infringement claims, related discovery and other issues that may impact the case
`schedule and application of default timelines in the Patent Local Rules. Demaray respectfully
`submits that the Court should fully consider the issues, including opportunities to minimize
`burdens and inefficiencies. The fact is that this case involves interplay with two earlier-filed
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 3 of 25
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`pending cases in Texas, four co-pending Applied IPRs, and unresolved issues relating to potential
`affirmative infringement and invalidity claims—i.e., complex issues. The parties both recognize
`the complexity of this action having submitted three prior Joint CMC Statements (November 4,
`2021, Dkt. No. 82, October 6, 2021, Dkt. No. 69, and January 14, 2021, Dkt. No. 27) each of
`which were longer than this statement.
`1. Jurisdiction and Service (Joint)
`See Dkt. No. 69.
`2. Updated Facts Since The Last Case Management Statement (Dkt. No. 82) (Joint)
`On November 19, 2021, Applied filed a Motion to Compel Compliance with Patent Local
`Rules, Dkt. No. 83, and a Motion to Shorten Time for Earlier Hearing or Determination on the
`Papers on its Motion to Compel Compliance with Patent Local Rules, Dkt. No. 84. On
`November 23, 2021, Demaray responded to the Motion to Shorten Time. Dkt. No. 85. On
`December 1, 2021, the parties filed a Joint Discovery Letter Brief before Magistrate Judge
`Cousins regarding Applied’s request for the deposition of Dr. Richard Earnest Demaray. Dkt.
`No. 86.
`On December 2, 2021, the Court issued an order referring Demaray’s Motion to Stay
`Pending Inter Partes Review (Dkt. No. 67), Applied’s Motion to Compel Compliance with Patent
`Local Rules (Dkt. No. 83) and Applied’s Motion to Shorten Time (Dkt. No. 84) to Magistrate
`Judge Cousins. Dkt. No. 87. The same day, the Court granted the Motion to Shorten Time,
`setting hearing for the Motion to Compel Compliance with Patent Local Rules for December 15,
`2021. Dkt. No. 88. The Court also set for hearing the other pending motions for the same day.
`Dkt. No. 89.
`On December 10, 2021, Demaray filed a Motion for Subsequent Case Management
`Conference. Dkt. No. 92. Demaray’s Motion is set for hearing on April 21, 2022, but Demaray
`does not oppose the Court holding a further Case Management Conference at its earliest
`convenience. Applied does not oppose the Court holding a further Case Management Conference
`at its earliest convenience if it believes one is necessary.
`On December 15, 2021, Magistrate Judge Cousins held a hearing and issued an order
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 4 of 25
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`(Dkt. No. 101) denying Demaray’s Motion to Stay Pending Inter Partes Review (Dkt. No. 67),
`granting Applied’s Motion to Compel Deposition of Dr. Demaray (Dkt. No. 86), and granting-in-
`part Applied’s Motion to Compel Compliance with Patent Local Rules (Dkt. No. 83).
`3. Legal Issues (Disputed)
`A. Applied’s Response:
`Applied believes that this case raises the following legal issues: (1) the construction of any
`disputed claim term in the Demaray Patents; (2) whether Applied or its products infringe the
`Demaray Patents; and (3) whether Applied has a license to the Demaray Patents.
`Demaray’s arguments that the legal issues in this case may expand to include issues of
`infringement, invalidity, damages, etc. are contrary to law and the Patent Local Rules. As a
`matter of Federal Circuit law, claims of patent infringement are compulsory counterclaims to a
`declaratory-judgment action seeking a declaration of noninfringement regarding the same patent
`and the same accused products. Capo, Inc. v. Dioptics Med. Prods., Inc., 387 F.3d 1352, 1356
`(Fed. Cir. 2004) (“In an action for declaration of noninfringement, a counterclaim for patent
`infringement is compulsory and if not made is deemed waived.”). Demaray already waived its
`right to assert infringement claims by not filing compulsory counterclaims of infringement when
`it answered on September 30, 2021. Furthermore, the Patent Local Rules expressly provide for
`what happens in such cases: the exchange of PLR 4-1 disclosures 14 days after the defendant
`answers. Applied complied, but Demaray refused, necessitating a motion to compel Demaray to
`comply with the Patent Local Rules. Dkt. No. 83. The Court has since confirmed that Demaray
`must comply, Dkt. No. 101, yet Demaray continues to delay providing its disclosures.
`Waiver aside, Demaray’s assertion that it “lacks details regarding Applied’s products and
`processes” cannot be reconciled with: (1) the substantial discovery Applied has provided in its
`responses to Demaray’s subpoenas in the WDTX cases, see, e.g., Dkt. No. 52, Exs. C, E and F;
`and (2) Demaray’s continued prosecution of infringement claims against Applied’s customers. In
`finding subject matter jurisdiction in this case, the Court reasoned “[w]hen considered along with
`Demaray’s other affirmative acts, including its October 9, 2020 preliminary infringement
`contentions, the subpoenas requests demonstrate its intent to enforce its patents and the threat of
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 5 of 25
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`future injury facing Applied.” Dkt. No. 63 at 11:18-21. Demaray’s later supplemental
`infringement contentions further confirm it alleges that Applied’s products infringe in the
`customer suits. See, e.g., Dkt. No. 37-11 (Feb. 5, 2021 Infringement Contentions to Intel). As
`recently as an August 30, 2021 letter from Demaray to Intel, Demaray asserted: “The record in
`this case overwhelmingly indicates that Intel has used, and continues to use, the claimed reactor
`configurations without Demaray’s permission to churn out semiconductor products from which
`Intel has obtained billions of dollars in revenue.” Demaray cannot make such allegations and
`continue its claims against Applied’s customers in Texas while telling this Court that it lacked
`sufficient information to decide whether to assert counterclaims of infringement when it answered
`(and still lacks sufficient information today). In short, Demaray’s claim that it needs more
`information is simply a delay tactic, which contravenes this Court’s exercise of discretionary
`jurisdiction “[g]iven the affirmative acts and the potential impact the resolution of this case could
`have on Demaray’s suits against Applied’s customers.” Id. at 14:11-14.
`Moreover, this Court’s Patent Local Rules require disclosure of infringement contentions
`(PLR 3-1) prior to the production by an accused infringer of confidential technical documents.
`Demaray also purportedly had a basis to file complaints against Intel and Samsung in the Western
`District of Texas based on their use of the same Applied products at issue in this declaratory
`judgment action, and thereafter served infringement contentions, again, without the production of
`any confidential technical documents from Intel, Samsung or Applied. On the other hand, by the
`time Demaray chose not to file compulsory counterclaims of infringement, Demaray was in the
`possession of hundreds of confidential technical documents from Applied and already deposed
`Applied on its PVD configurations pursuant to a subpoena it served last December.
`Demaray’s statements below that Applied has refused to provide technical details of its
`products misrepresents the information provided to Demaray in the customer suits. Demaray
`either has not reviewed Applied’s robust document production or simply refuses to accept what
`the evidence shows. Indeed, last week during a discovery hearing in the Customer Suits in
`WDTX, Demaray argued that Applied’s schematics (produced in May 2021) were insufficient,
`representing that “schematics that Applied points to don’t even show an RF bias source for these
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 6 of 25
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`reactors, let alone filter[s] associated therewith.” Applied not only provided a schematic showing
`the RF bias source, but also provided a sworn declaration explaining the schematic and
`connection. Applied asked Demaray to explain on what basis it made this representation to the
`Court, but Demaray refused to respond. Finally, contrary to Demaray’s allegations below,
`Applied’s technical disclosures in discovery are not limited to its products at issue in the customer
`suits. Nor did Demaray limit its examination of Applied nearly a year ago to products sold to
`Intel and Samsung. If the Court wishes, Applied welcomes the opportunity to submit under seal a
`detailed accounting of the discovery and disclosures provided to Demaray in the customers suits
`(which are deemed produced in this action by agreement) to refute Demaray’s bare allegation.
`B. Demaray’s Position:
`Applied has raised the following legal issues: Applied’s request for a declaration of non-
`infringement for its reactors and whether Applied has a valid license independent of assignment
`provisions that the Court has already confirmed are unlawful and void as a matter of public
`policy.
`It is still unclear, however, whether affirmative infringement claims against Applied or
`affirmative invalidity claims by Applied will be at issue in this case. As Demaray has
`consistently told the Court, it needs targeted discovery on Applied’s reactors to make an
`infringement determination. See Dkt. 27 at 6-8 (Prior CMC Statement); Dkt. 69 at 3-4 (Updated
`CMC Statement); Dkt. 82 at 4-7 (Second Updated CMC Statement). For example, the Demaray
`Patents have claim elements requiring the use of a reactor configuration with “a narrow band-
`rejection filter that rejects at a frequency of the RF bias power supply coupled between the pulsed
`DC power supply and the target area.” See, e.g., ’276 Patent, claim 1. Applied has maintained in
`the Texas cases that the subset of the Texas defendants’ reactors supplied by Applied lack a
`narrowband rejection filter or an equivalent. Despite these assertions, Applied has failed, both
`here and in Texas, to disclose the details of the protective filters or alternative protective
`mechanisms used in its reactors with sufficient specificity to allow Demaray to make a full
`infringement evaluation.
`Demaray has proposed since the beginning of this case that Applied provide targeted
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 7 of 25
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`product disclosures (as detailed in Section 8 below) detailing its use of the claimed reactor
`configurations (Demaray’s current proposal is that Applied make such disclosures by December
`31, 2021, as reflected in the attached proposed schedule). Once Applied provides the required
`details on its products and processes, including details on the protective filters or alternative
`protective mechanisms used, Demaray will timely make infringement determinations (Demaray’s
`proposal is that it do so within 30 days of Applied’s targeted disclosures).
`Applied has failed to provide the requisite disclosures on its reactors for Demaray to make
`affirmative infringement determinations. Demaray has served both interrogatories and document
`requests on Applied in this case. In responding, despite seeking a declaratory judgment of non-
`infringement for all of its reactors, Applied limited its responses to just those reactors at issue in
`Texas and pointed to its disclosures in Texas. Applied has since supplemented its response and
`asserted that all of its reactors are configured the same as the reactors at issue in Texas, but again
`relies only on its disclosures in Texas and has not produced documents supporting such an
`assertion. While Applied points to schematics produced in Texas, those schematics do not
`provide the circuit-level detail required to analyze protective filters and, in many cases, do not
`reflect the as-configured reactors that Applied supplies.
`In Texas, Demaray served discovery on the Texas defendants and subpoenaed Applied for
`the details on any protective filters or protective mechanisms for the target power sources used in
`defendants’ reactors, including those that Applied supplies, among other information, months
`ago, but it has not been produced. For example, the Texas defendants and Applied admit that
`there are protective RF filters for certain reactors supplied by Applied, but have refused to
`provide circuit-level details on those filters with sufficient specificity to determine whether the
`filters are “narrowband rejection filters.” For other reactors supplied by Applied for which the
`Texas defendants and Applied claim there are no protective filters, they have failed to identify
`what alternative protective mechanisms are used in lieu of such filters. Applied claims to lack
`further details on the filters or alternative protective mechanisms used in its reactors and Demaray
`has thus been forced to seek physical inspection and testing of representative reactors, power
`sources and connectors (e.g., cables). The Texas court has ordered these inspections in the next
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 8 of 25
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`30-60 days.
`Applied’s suggestion that is has already disclosed the details on its reactors is contradicted
`by the Texas court’s recent orders compelling further disclosures. On September 27, 2021, the
`Texas court granted Demaray’s motions to compel the Texas defendants/Applied to provide
`additional details on both the RF filters and alternative protective mechanisms used in the Texas
`defendants’ reactors, including requiring physical inspections of the filters/alternative protective
`mechanisms, providing certain parts, including the filter and other parts like DC power sources,
`for inspection, and requesting details from their power source suppliers. The Texas defendants
`and Applied failed to comply with the Texas court’s orders, necessitating yet another motion to
`compel heard on November 4, 2021. At that hearing, the Texas court again granted Demaray’s
`further motion to compel and ordered Applied to provide representative reactors for inspection by
`Demaray. Again, the Texas defendants/Applied failed to do so, requiring a further motion to
`compel heard last week on December 16. At that hearing, the Texas court ordered such
`inspections to occur in the next 30-60 days.1 Applied’s assertions regarding the scope of its
`disclosures in Texas are fundamentally inconsistent with these orders.
`Applied’s assertion that Demaray has waived the ability to bring affirmative infringement
`claims in this case when Applied itself refuses to provide the discovery necessary to make such
`determinations is also baseless. See, e.g., Seiko Epson Corp. v. Coretronic Corp., 2008 WL
`2563383, *2–*3 (N.D. Cal. 2008) (granting patentee’s motion to amend its preliminary
`infringement contention to accuse added models where it was not able to learn of the additional
`products until the accused infringer provided discovery). Applied argues that Demaray must
`bring affirmative infringement claims under Patent L.R. 3-1 before getting the requested Applied
`product information. There are several issues with Applied’s proposed ordering. First, the Patent
`Local Rules nowhere state that Patent L.R. 3-1 disclosures are required for Applied to produce
`technical documents. Applied brought declaratory judgment claims for non-infringement, it must
`produce information to substantiate those claims, including technical documents. Second, it is
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` Applies also points to Demaray’s preliminary infringement contentions in Texas, but those
`contentions are necessarily limited by the Texas defendants’ and Applied’s disclosures to date.
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`uncontested that the configuration details of Applied’s reactors are not publicly available. In
`these circumstances, parties are generally allowed discovery to determine whether affirmative
`infringement claims are warranted. See, e.g., Seiko, *2–*3 (supplemental contentions allowed
`based upon recent discovery); Pac. Sci. Energetic Materials Co. (Arizona) LLC v. Ensign-
`Bickford Aerospace & Def. Co., 281 F.R.D. 358, 363 (D. Ariz. 2012) (“Erring on the side of
`avoiding Rule 11 sanctions at the risk of waiving its counterclaim, the defendant diligently sought
`discovery of technical documentation to support its claim of infringement but has been unable to
`obtain it because of the regulations that subject disclosure of this information to approval by third
`parties … I FIND good cause to amend the scheduling order to allow the defendant to amend its
`answer and file a counterclaim.”).
`Applied’s suggestion that Demaray’s need for this targeted discovery calls into question
`Demaray’s Rule 11 basis for continued prosecution of the claims in Texas is also baseless. In the
`Texas complaints against Intel and Samsung, Demaray accused methods of thin-film deposition
`in a PVD reactor with a specific configuration used by Intel and Samsung, and that specific
`reactor configuration. Applied ignores that those claims were based upon, among other sources,
`confidential reverse engineering of Intel and Samsung products suggesting Intel’s and Samsung’s
`use of the infringing reactor configurations, including the use of a narrow band-rejection filter.
`Demaray is unaware of such materials being available for Applied. Moreover, the Texas
`defendants’ and Applied’s continued stonewalling of disclosures regarding the configuration of
`the Applied-supplied reactors in Texas does not support a Rule 11 challenge there.
`4. Motions (Joint)
`On December 10, 2021, Demaray filed a Motion for a Subsequent Case Management
`Conference. Dkt. No. 92. Demaray’s Motion is set for hearing on April 21, 2022, but Demaray
`does not oppose the Court holding a further Case Management Conference at its earliest
`convenience. Applied does not oppose the Court holding a further Case Management Conference
`at its earliest convenience if it believes one is necessary.
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 10 of 25
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`5. Amendment of Pleadings (Disputed)
`A. Applied’s Position:
`Applied references its statement in the prior CMS (Dkt. No. 69) and positions on Legal
`Issues (Section 3 above) and the proposed Schedule (Section 13 below). Demaray has already
`waived its compulsory counterclaims of infringement, and Applied will oppose any motion by
`Demaray to amend the pleadings to belatedly add them to the case. In the absence of an
`infringement claim, there will also be no invalidity claims in this case.
`B. Demaray’s Position:
`Regarding whether Demaray will assert affirmative infringement counterclaims against
`Applied, as discussed in Section 3, Demaray currently lacks details regarding Applied’s products
`and processes sufficient to make an infringement determination. Demaray has proposed in the
`attached schedule that Applied provide targeted disclosures on its reactors as detailed in Section 8
`by December 31, 2021, and that Demaray make a determination regarding affirmative
`infringement claims within 30 days of Applied’s targeted disclosures (current proposal is by
`January 31, 2022).
`Regarding invalidity in this case, Applied did not include affirmative claims for invalidity
`in its complaint in this matter and proposes that it be permitted to delay bringing claims and
`defenses regarding the validity of the Demaray patents that it confirmed during the meet and
`confer process for case management in Applied I and at the prior case management conference in
`this case are ripe. This includes claims and defenses regarding invalidity and improper
`inventorship. There is no proper basis on which Applied should be excused from bringing such
`claims in a timely manner. In accordance with settled law they should be brought, if at all, within
`14 days of the further case management conference.
`6. Evidence Preservation (Joint)
`The parties will work together to propose an ESI Order for the Court’s approval prior to
`January 7, 2022 as reflected in the proposed case schedule.
`7. Disclosures (Joint)
`The Parties have served their initial disclosures.
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`Case 5:20-cv-09341-EJD Document 106 Filed 12/22/21 Page 11 of 25
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`8. Discovery (Disputed)
`The parties reference their prior submission and agreement regarding discovery limits.
`Dkt. No. 27. The parties will propose a protective order for the Court’s approval prior to January
`7, 2022 as reflected in the proposed case schedule.
`A. Applied’s Position:
`This case involves two straight-forward disputes between Applied and Demaray:
`(1) whether Applied and its products infringe Demaray’s patents and (2) whether Applied has a
`license to Demaray’s patents. As noted in the proposed schedule below, Applied believes fact
`discovery can be completed by March 2022, if not earlier, as Applied anticipates taking only a
`limited amount of discovery relating to these two issues and has promptly served discovery.
`Applied has already taken the deposition of Symmorphix’s lead-negotiator of the Sales and
`Relationship Agreement containing Applied’s license and will be deposing Demaray’s principal,
`Dr. Demaray next month. Demaray’s arguments on coordination of discovery between this case
`and the Customer Suits were already rejected by Magistrate Judge Cousins in granting Applied’s
`motion to compel the deposition of Demaray’s principal, Dr. Demaray. Dkt. No. 101.
`Regarding discovery into Applied’s products, Applied references its statement above on
`legal issues and below regarding the proposed schedule. Contrary to Demaray’s assertion,
`Applied provided the “targeted discovery” Demaray seeks months ago in response to multiple
`subpoenas in the Customer Suits. Demaray relies on its initiation of several discovery hearings in
`the WDTX to argue that it still does not have the discovery it needs—that is not because Applied
`has refused to provide discovery, but rather because Demaray is dissatisfied that the evidence
`shows that Applied’s products do not infringe. Relying on the WDTX Court’s plain and ordinary
`meaning construction of “narrow band rejection filter”, Demaray now alleges that a cable meets
`this claim limitation. But in its attempt to avoid this Court’s jurisdiction, Demaray took a
`different position. For example, in its motion to dismiss, Demaray characterized what it now
`asserts is a cable that connects components as “a specific configuration of a filter over other
`filters.” Dkt. No. 30, 8:22–26. Despite the production of schematics, bill of materials, visual
`inspections and sworn declarations, Demaray now demands that either Applied or its customers
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`permit entry by Demaray into either customer semiconductor fabrication facilities or Applied’s
`research and development lab so that Demaray may, e.g., conduct “non-destructive testing using a
`network/impedance analyzer to determine if any filtering is occurring” by the cable. Dkt. No. 93-
`1. In the alternative, Demaray seeks an adverse inference in WDTX that Applied’s reactors used
`by its customers have the claimed required narrow band rejection filter when there is nothing
`more than a cable. Id. Demaray may not be willing to make such objectively baseless allegations
`in this Court, but Demaray should not be permitted to continue using its indecision to delay this
`case from moving forward.
`B. Demaray’s Position:
`Applied’s conduct in this case should dispel any notion that the case is limited to
`“straight-forward” disputes. As discussed above in Section 3, Demaray currently lacks details
`regarding Applied’s products and processes sufficient to make an infringement determination.
`Demaray has proposed that Applied to provide targeted product disclosures by December 31,
`2021, sufficient to detail (1) Applied reactors with DC power to the target and RF bias to the
`substrate (including the reactor configurations, power sources, magnetron usage, and heating
`elements), (2) the details of any RF filters or alternative protective mechanisms used (including
`the type of RF filter/alternative protective mechanism, the operating frequency, and the attenuated
`bandwidth), (3) the details on Applied’s use of such reactors (including the targets and substrates
`used and thin-films deposited), (4) Applied’s interactions with its customers regarding the same
`(e.g., to address indirect infringement issues), and (5) Applied’s importation and exportation to
`reactors and chamber parts sufficient to address Applied’s activities abroad (e.g., under 35 U.S.C.
`§ 271(f)). Despite Applied bringing this case asking for a declaratory judgment of non-
`infringement of the Demaray patents and having an obligation to support such claims, Applied
`has refused to prioritize this targeted discovery to allow Demaray to make affirmative
`infringement determinations regarding Applied’s use of the claimed reactor configurations.
`Applied casts dispersions on Demaray’s pursuit of discovery on the cables used in these reactors,
`but such cables can be designed to function as filters to attenuate specific frequencies and such
`discovery is proper.
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`Applied’s argument that it will only take “a limited amount of discovery” in this case is
`contradicted by its own actions in this and the Texas cases. Regarding Applied’s license defense,
`the Court’s recent order on the motion to dismiss held that the assignment provisions in employee
`agreements underlying various Applied claims are “void and unenforceable as an unlawful
`restraint on trade in violation of California Business and Professions Code § 16000.” Dkt. No. 63
`at 20. The Court allowed Applied’s license defense to survive only to the extent such a defense is
`independent of the unlawful assignment provisions. Because there is no other provision that
`Applied identifies which would arguably give rise to a license, it is left arguing that the Court
`should ignore the actual language of the contract in favor of Applied’s characterization of the
`parties’ relative subjective intents. See Dkt. No. 1, Complaint at ¶¶ 80-81. To the extent
`Applied’s argument that this language should be ignored is considered, documents and testimony
`from Applied Komatsu, Applied Materials, Symmorphix, Corning (Symmorphix’s customer
`involved with the amended contract terms), as well as the negotiators, counsel, etc. will be
`necessary. Indeed, the defendants in the Texas cases have sought much of this discovery already.
`See, e.g., Dkt. 67 at 7-8 (summary of discovery). In the Texas cases, Applied’s counsel on behalf
`of the Texas defendants identified 20+ witnesses with potential information relating to the very
`same licensing defense. See Dkt. 81-2, Exs. 11-12 (Texas defendants’ initial disclosures). In
`addition, given that Applied is putting its intent at issue, there are likely waiver issues regarding
`any Applied claim of attorney-client privilege that will need to be addressed.
`A second issue is that Applied has also demanded expedited Demaray and third party
`depositions in this case. The Federal Rules require that the Parties take reasonable efforts to
`minimize duplicative discovery to alleviate the burdens on witnesses. There are significant
`burdens imposed by Applied’s decision to pursue overlapping/duplicative causes of action in
`multiple