Case 5:20-cv-09341-EJD Document 118 Filed 01/20/22 Page 1 of 6
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`January 20, 2022
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`Honorable Magistrate Judge Nathaniel M. Cousins
`United States District Court Northern District of California
`San Jose Courthouse, Courtroom 7, 4th Floor
`280 South 1st Street, San Jose, CA 95113
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`Re:
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`Applied Materials, Inc. v. Demaray LLC, 20-cv-09341-EJD (N.D. Cal.)
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`Dear Judge Cousins,
`Demaray LLC (“Demaray”) and Applied Materials, Inc. (“Applied”) submit this joint letter
`regarding Demaray’s requests for targeted discovery regarding Applied’s products. Demaray
`moves to compel Applied to provide targeted discovery on its reactors for PVD processes
`(“Targeted Product Disclosures”) by January 31, 2022, to allow Demaray to make determinations
`regarding whether affirmative infringement claims are appropriate in this case and provide
`infringement contentions under PLR 3-1. Applied objects to any PLR 3-1 disclosures as Demaray
`has not sought leave to amend its answer to assert compulsory counterclaims of infringement. The
`parties have met and conferred, but were unable to resolve their dispute without Court intervention.
`The parties are available for a hearing on January 26, 2022, subject to the Court’s availability.
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`Defendant Demaray’s Statement
`Applied has no basis for refusing to provide the Targeted Product Disclosures necessary to move
`this case forward. First, Applied is obligated to provide such discovery as it is necessary to
`substantiate its DJ non-infringement claims. Second, it is still unclear whether affirmative
`infringement claims against Applied will be at issue. As Demaray has consistently told the Court,
`it needs targeted discovery on Applied’s reactors to make such determinations. If Applied truly
`wanted to move things forward, it could have provided these disclosures months ago—it chose not
`to. The Court should grant Demaray’s motion and order complete disclosures by January 31, 2022.
`Demaray can then make a decision regarding whether affirmative infringement claims are
`appropriate and the parties and the Court can address the case schedule, including claim
`construction disclosures, with that determination in mind.
`A. Background
`Applied has sought a declaratory judgement that none of its configured reactors, or its use of those
`reactors, infringes the Demaray patents. It is uncontested that the Demaray patents are directed at
`particular configurations of reactors for PVD processes and have claim elements requiring, among
`other limitations, the use of “a narrow band-rejection filter,” for example, to protect the DC power
`source from damaging feedback from the RF bias. See, e.g., ’276 Patent, claim 1. It is also
`uncontested that the configuration details of Applied’s reactors are not publicly available. To
`substantiate its DJ claims, Applied needs to provide discovery on its reactors, including, among
`other disclosures, details of its reactor configurations, any filters used to protect the power sources,
`communications with its customers implicating indirect infringement, and its importation and
`exportation activities to address infringement under 35 U.S.C. 271(f).
`Demaray has consistently told the Court that Demaray needs targeted discovery on Applied’s
`reactors to make affirmative infringement determinations in this case. See Dkt. 27 at 6-8; Dkt. 69
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`Case 5:20-cv-09341-EJD Document 118 Filed 01/20/22 Page 2 of 6
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`at 3-4; Dkt. 82 at 4-7. As outlined in the most-recent Joint CMC Statement, Demaray has proposed
`that Applied prioritize providing Targeted Product Disclosures 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)). Dkt. 106 at 11-
`13. Applied has refused to do so pointing to limited discovery from Texas and generic BOMs.
`Demaray also served interrogatories and requests for production asking for these Targeted Product
`Disclosures, but Applied has refused to provide full responses, related documents or the relevant
`reactor components for inspection and testing. Demaray is prepared to submit the associated
`discovery requests and Applied’s responses if requested by the Court.
`As one example, Applied has maintained in the co-pending Texas cases that the subset of the Texas
`defendants’ reactors supplied by Applied lack a narrowband rejection filter or an equivalent.
`Despite presumably having a basis for this assertion, Applied has failed, both here and in Texas,
`to disclose, among other information, the details of the protective filters or alternative protective
`mechanisms used in its reactors. Applied has asserted that it does not have documents detailing
`such filters and has insisted that subpoenas to, and inspections at, its part suppliers are required.
`B. Argument
`To ensure that the litigation proceeds in the most sensible and efficient manner possible, the Court
`should order Applied to provide the requisite disclosures on its reactors forthwith. Demaray served
`both interrogatories and document requests on Applied in this case seeking this information. 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 relies only on its disclosures in Texas
`and a few generic BOMs and has not produced documents supporting such an assertion.
`Applied’s disclosures in Texas do not address the Target Product Disclosures requested here. For
`example, the Texas defendants and Applied admit that there are protective RF filters for certain
`reactors supplied by Applied (i.e., the Cirrus reactors), 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, RF filters and connectors
`(e.g., cables). Just yesterday, a supplier of an Applied RF filter provided schematics confirming
`the use of a band rejection filter. Demaray is still waiting on the component values to determine
`the operating frequency and bandwidth of the filter. Similarly, details on Applied’s use of reactors
`to customers other than Intel and Samsung, interactions with such customers to address indirect
`infringement issues, and importation and exportation details for such reactors have not been
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`Case 5:20-cv-09341-EJD Document 118 Filed 01/20/22 Page 3 of 6
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`disclosed in Texas.
`Applied’s suggestion that is has already disclosed all the necessary details on its reactors in Texas
`is also contradicted by the Texas court’s recent orders compelling further disclosures. On
`September 27, 2021, the Texas court granted Demaray 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 on December 16, 2021. At that hearing, the
`Texas court ordered
`the
`requested disclosures,
`including potential
`inspections of
`reactors/components to occur in the next 30-60 days. Applied’s assertions regarding the scope of
`its disclosures in Texas are fundamentally inconsistent with these orders.
`C. Demaray’s proposal
`Demaray requests that the Court order Applied to provide the Targeted Product Disclosures listed
`above by January 31, 2022. Once Applied completes its production of these details on its products
`and processes, Demaray will timely make infringement determinations.
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`Applied Materials’ Statement
`Demaray’s motion should be denied as moot because Applied already provided “targeted
`discovery” necessary to determine whether to bring infringement claims. That discovery, much
`of which Applied provided a year ago, confirms that none of Applied’s products infringe, at least,
`because none have the claim required narrow band rejection filter (“NBRF”). Despite that
`discovery, Demaray continues to maintain its claims in Texas based on Applied’s customers’ use
`of the same products Demaray claims it does not know whether it has a Rule 11 basis to allege
`infringe in this case. Meanwhile, Demaray has repeatedly advocated for this Court to not “derail”
`its customers suits, currently set for trial on July 11, 2022. It makes no sense that Demaray can be
`six months from trial in Texas alleging infringement of Intel and Samsung’s use of Applied’s
`products but maintain indecision as to whether to even bring claims on those same products here.
`The only plausible explanation is that Demaray’s motion is not directed to obtaining more
`discovery (which it already has or does not exist), but an excuse for its purported indecision in
`order to further delay this case from proceeding. This is made clear from the multiple CMC
`statements and recent proposed order with competing schedules. Dkt. No. 116. Therein, Demaray
`proposes Patent L.R. 3-1, 3-2 deadlines if infringement claims are allowed and thereafter resetting
`Markman deadlines. The Court should not permit Demaray to continue these delay tactics.
`A. The Court Already Confirmed that Demaray Made Direct Infringement
`Claims Against Applied’s Products in its Customer Suits in Texas
`As explained during the Jan. 12, 2022 hearing, Judge Davila already determined that the Court has
`subject matter jurisdiction “because the claims and initial infringement contentions presented in
`Demaray’s WDTX Customer Cases suggest a substantial direct infringement controversy. See 35
`U.S.C. §271(a).” Dkt. No. 63, 12:13-17. In assessing Demaray’s preliminary infringement
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`Case 5:20-cv-09341-EJD Document 118 Filed 01/20/22 Page 4 of 6
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`contentions, Judge Davila reasoned that “Demaray ‘could just as easily have asserted a claim for
`direct infringement against [Applied], based on the same underlying circumstances in the customer
`suit.” Id. at 13:20-22. Since then, Applied has produced hundreds of documents, made a corporate
`representative available for deposition, provided declarations regarding schematics and
`inspections of its products, and facilitated discovery from Applied’s suppliers of potentially
`relevant components. In turn, Demaray has supplemented its contentions in Texas four times—
`the third time six weeks before Demaray’s September 30, 2021 deadline to answer and decide
`whether to assert infringement. Demaray chose not to do so. The latest supplementation came
`less than a month ago, and those contentions span hundreds of pages. If Demaray continues to
`claim it lacks sufficient information to allege infringement in this Court, it is because such
`information (i.e., evidence of a NBRF) does not exist or Demaray has a different view of Rule 11
`before this Court compared to Texas. Demaray’s Rule 11 obligations should apply equally.
`B. Applied Has Already Provided Robust Discovery Regarding its Products
`Demaray’s claim that Applied has not or refuses to provide the targeted discovery is untrue. Nor
`has Applied limited its interrogatory responses or document production to products supplied to
`Intel and Samsung. Applied addresses each of the requested categories in turn:
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`(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). Applied
`produced its manuals and other documents regarding its products, including specific components
`therein, a year ago in response to Demaray’s subpoenas which Judge Davila relied on, in-part, to
`find subject matter jurisdiction. Dkt. No. 63, 10:19-11:11. An Applied witness was also deposed
`in February 2021 regarding those products, including: “[t]he power sources for the target and the
`substrate in RMS PVD chamber in Applied reactors, including suppliers, configuration…” (Topic
`6); “[c]onfiguration of a RMS PVD chamber in Applied reactors to include providing pulsed DC
`power to the target…” (Topic 7); and “[t]he filters used for RMS PVD chambers in Applied
`reactors, including suppliers, types and configuration of the filters…” (Topic 9). Demaray did not
`limit its examination to PVD chambers sold to Intel and Samsung. Since then, Applied has also
`produced bill of materials and schematics for its PVD chambers, as well as assembly drawings,
`specifications, and other documentation for any component Demaray identified and requested
`pursuant to a stipulation the parties entered into on July 9, 2021. Dkt. No. 52, Ex. F.
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`(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). Again, Demaray is already in possession of this information. To the extent Demaray
`has been unable to identify a component such that it does not believe it has a Rule 11 basis to
`allege it to be the claim required NBRF it is because such component(s) do not exist. Demaray
`attempts to muddy the issue, stating above that “Applied admit that there are protective RF filters
`for certain reactors supplied by Applied (i.e., the Cirrus reactors) but have refused to provide
`circuit-level details on those filters with sufficient specificity to determine whether the filters are
`“narrowband rejection filters.” Again, not so. Applied produced the specification for this
`component a year ago and produced a frequency response generated by the component supplier
`months ago. Those documents confirm the component cannot be the claim required NBRF.
`Demaray has known for over a year that Applied does not have circuit-level schematics for that
`component, but waited until just recently to serve the supplier with a subpoena. Nevertheless, in
`response, the supplier has generated and produced a circuit-level schematic. Demaray cannot
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`Case 5:20-cv-09341-EJD Document 118 Filed 01/20/22 Page 5 of 6
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`continue to ignore the discovery it has been provided.
`Regarding the remainder of potentially accused PVD chambers, there is no more discovery that
`Applied can provide to prove the non-existence of the filter Demaray is searching for. Applied
`produced electrical schematics, bill of materials, and months ago identifying every single filter,
`regardless of type or location. Most recently, Demaray has asserted that the cable connecting the
`power supply to the target could be the claimed filter. Even in response to this baseless theory,
`Applied already identified the supplier and produced its relevant documents regarding its cables.
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`(3) the details on Applied’s use of such reactors (including the targets and substrates used
`and thin-films deposited). While it is unclear why Demaray needs this information to make
`infringement determinations as claim 1 of each asserted patent is not limited to any particular
`material deposited, Demaray also already has this information in the bill of materials Applied
`produced, which identifies the type of material each chamber is designed to deposit.
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`(4) Applied’s interactions with its customers regarding the same (e.g., to address indirect
`infringement issues). Demaray fails to explain what “interactions with its customers” it is seeking
`and more importantly, why information responsive to this vague request is necessary to determine
`whether it will make infringement claims. Demaray has already accused Intel and Samsung
`(Applied’s customers) of direct infringement based on their use of Applied’s products, and taken
`substantial discovery regarding Applied’s sale, delivery and installation of those products. Indeed,
`Demaray already deposed Applied on its “Sales and delivery of Applied reactors with a RMS PVD
`chamber, including the locations of sales, offers for sale, delivery, installation and configuration
`of such reactors…” (Topic 11). Tellingly, Demaray’s preliminary contentions in Texas only
`included boilerplate indirect infringement allegations and still do today. Nevertheless, Applied
`already agreed to identify all of its customers for potentially relevant PVD chambers within the
`last six years. It is unclear what further discovery Demaray seeks (or needs) at this time.
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`(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)). Similar to (4), Demaray
`fails to explain what discovery it is seeking and why it is necessary. Applied’s importation and
`exportation of reactors or components is not relevant to whether Applied’s products directly
`infringe under 35 U.S.C. § 271(a). Demaray’s suggestion that it needs to know precisely every
`possible way it can allege infringement under 35 U.S.C. § 271 to make an infringement claim
`demonstrates that this motion is all about delay. Moreover, like (4), Demaray has already obtained
`discovery from Applied regarding importation and exportation issues. For example, Demaray
`deposed Applied on (Topic 2) “Sales and delivery of Applied reactors with a RMS PVD chamber,
`including the locations of sales, offers for sale, delivery, installation and configuration of such
`reactors, the persons involved and documents related thereto,” already has accused a foreign
`customer (Samsung) of infringement, and knows where Applied’s PVD chambers are
`manufactured. Like (4), it is unclear what further discovery Demaray seeks (or needs) at this time.
`C. Applied’s Proposal
`Considering the Court’s findings on subject matter jurisdiction discussed above, Demaray’s
`contentions in the customer suits, and the robust discovery Applied (and its suppliers) already
`produced, Demaray’s motion should be denied. The Court should allow this case to proceed based
`on the claims actually made—Applied’s claims of non-infringement and license—and decline to
`further delay claim construction based on Demaray’s purported claim that it needs more discovery.
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`Respectfully submitted,
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`/s/ C. Maclain Wells
`C Maclain Wells
`of Irell and Manella LLP
`Counsel for Defendant
`Demaray LLC
`Respectfully submitted,
`/s/ Philip Ou
`Philip Ou
`of PAUL HASTINGS LLP
`Counsel for Plaintiff
`Applied Materials, Inc.
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