Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 1 of 7
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`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
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`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
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`Attorneys for Plaintiff
`APPLIED MATERIALS, INC.
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`APPLIED MATERIALS, INC.,
`Plaintiff,
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`vs.
`DEMARAY LLC,
`Defendant.
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`CASE NO. 5:20-cv-09341-EJD
`PLAINTIFF APPLIED MATERIALS,
`INC.’S MOTION TO STRIKE
`DEFENDANT DEMARAY LLC’S
`LETTER BRIEF FOR LEAVE TO
`AMEND ITS ANSWER
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`Hearing Date: June 30, 2022
`Hearing Time: 9:00 a.m.
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`APPLIED’S MOTION TO STRIKE
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 2 of 7
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`NOTICE OF MOTION AND MOTION
`PLEASE TAKE NOTICE that on June 30, 2022, at 9:00 a.m., or as soon thereafter as the
`matter may be heard, Plaintiff Applied Materials, Inc. (“Applied”) will and hereby does move the
`Court for an order striking Defendant Demaray LLC’s (“Demaray”) Discovery Letter Brief to
`Amend Demaray’s Answer and add Affirmative Counterclaims, Dkt. No. 127. In the alternative,
`Pursuant to L.R. 7-1(b), Applied requests this motion to be decided on the papers, without a
`hearing. The Motion is based on the Civil Local Rules, this Notice of Motion, the Points and
`Authorities, and on other such evidence as may be presented in connection with this Motion.
`Pursuant to Local Rule 37-1(a), counsel for Applied certifies that it has met and conferred
`with counsel for Demaray for purposes of attempting to resolve the dispute and the parties were
`unable to do so.
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`APPLIED’S MOTION TO STRIKE
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 3 of 7
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`MEMORANDUM OF POINTS AND AUTHORITIES
`Applied respectfully moves to strike Demaray’s Discovery Letter Brief to Amend
`Demaray’s Answer and add Affirmative Counterclaims, Dkt. No. 127 (“letter brief”). This Court’s
`Local Rules make clear that Demaray must file a properly noticed motion under Local Rule 7-1(a)
`in order to seek leave to amend its answer to add infringement claims in this case. Demaray refused
`to do so, instead seeking an end-run to its requested relief by invoking Magistrate Judge Cousins’
`procedures for submitting discovery disputes for his Honor’s resolution. But Demaray’s requested
`relief is neither a discovery dispute nor an issue that has been referred to Magistrate Judge Cousins.1
`Nor are Applied’s objections simply procedural in nature. Demaray’s letter brief acknowledges
`that the factors governing amendment for the Court to consider include Demaray’s bad faith and
`undue delay, as well as the prejudice to Applied. Yet through Demaray’s self-help in invoking the
`letter brief process, Demaray improperly seeks to limit Applied’s ability to respond to a two page
`letter with no declarations or exhibits absent leave of Court pursuant to Magistrate Cousins’
`discovery dispute procedures. Not only is Demaray’s letter brief procedurally improper, but also
`highly prejudicial to Applied. For the reasons explained herein, the letter brief should be struck.
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`I.
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`BACKGROUND
`On December 24, 2020, Applied filed this action seeking declaratory relief that its products,
`including those used by its customers Intel and Samsung and that are accused of infringement in
`Demaray’s customers suits in the Western District of Texas, do not infringe Demaray’s patents.
`Dkt. No. 1. Demaray thereafter moved to dismiss, arguing the Court lacked subject matter
`jurisdiction. Dkt. No. 30. On September 16, 2021, the Court denied Demaray’s challenge, noting
`the affirmative acts Demaray had taken against Applied, including “creating preliminary
`infringement contentions which included references to Applied’s reactors, refusing to grant Applied
`a covenant not to sue, requesting discovery from Applied to determine if Applied allegedly
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`1 Applied does not object to Magistrate Judge Cousins addressing Demaray’s requested relief —
`and would consent to a proposed referral as part of an order instructing Demaray to file a properly
`noticed motion under the Local Rules that allows Applied to fully respond— in particular given
`the Court’s referral of certain non-discovery motions to Magistrate Judge Cousins in the past,
`Dkt. Nos. 87 and 110.
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`APPLIED’S MOTION TO STRIKE
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 4 of 7
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`infringes the Asserted Patents, and making representations about the need for discovery from
`Applied to determine which of Intel’s and Samsung’s reactors allegedly infringe.” Dkt. No. 63 at
`12:5-9. In finding an actual controversy, the Court 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.
`Despite these findings, and having ample discovery that Applied provided in response to
`multiple subpoenas, on September 30, 2021, over a year into the customer suits, Demaray filed its
`Answer electing not to assert compulsory claims of infringement. Dkt. No. 66. Thereafter, in an
`effort to continue delaying this case from proceeding, Demaray, through numerous Court filings
`and hearings, continued to rely on its purposed indecision as to whether to bring infringement
`claims. See, e.g., Dkt. No. 69 at 3:16-18 (“In addition, if the case proceeds, Demaray currently
`lacks details regarding Applied’s products and processes sufficient to make a determination
`regarding whether it will assert affirmative infringement counterclaims against Applied…); Ex. A,
`December 15, 2021 Hr’g Tr. at 7:12-8:2 (“We know that their reactors have all of these other
`limitations, but we have this problem with the filter that is present… And so we’re being very
`cognizant of our Rule 11 obligations here. And they have raised issues in the Texas cases where
`they said, hey we question your Rule 11. And in fact, in their briefing to you, they stated the exact
`same thing. We’re being cognizant, respectful of it, and once we get filter details, we can make an
`affirmative determination, are there going to be affirmative infringement claims against Applied,
`standing alone, its reactors that it’s supplying or not.”); Ex. B, January 12, 2022 Hr’g Tr. at 18:21-
`19:1 (“And so we’re trying to be really really cognizant of Rule 11 and respect the obligations here,
`and that’s all we’re doing. If the Plaintiffs [sic] want to admit that our contentions in Texas are
`sufficient to cover a Rule 11 basis for them, we will submit those to your Court, to your Honor
`tomorrow….”).
`On January 14, 2022 at the instruction of Magistrate Judge Cousins, the parties filed a
`proposed order with competing case schedules. Dkt. No. 116. Therein, Demaray proposed that
`claim construction deadlines be “reset… if affirmative infringement claims are allowed” seeking
`to delay the claim construction hearing to the end of August 2022. Id. at 2-3. In an apparent effort
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`APPLIED’S MOTION TO STRIKE
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 5 of 7
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`to urge the Court to reset and further delay claim constructions deadlines based on belated
`affirmative infringement claims, on February 7, 2022, Demaray submitted a two-page letter brief
`to Magistrate Judge Cousins seeking leave to amend its Answer to accuse Applied’s Cirrus chamber
`of infringement. Yet the Cirrus chamber has been accused of infringement in the customer suits
`since Demaray’s preliminary infringement contentions in the customer suits, served more than
`fourteen months ago. Dkt. No. 1, Ex. C (October 9, 2020 Infringement Contentions) at 12 (“As a
`further example, Intel configures and uses, among other reactors, Intel Accused Products in the
`Endura product line from Applied Materials, Inc. for depositing such layers….For example, the
`Endura product line includes reactors that can be configured for deposition of… TiN layers (e.g.,
`Cirrus ionized PVD chamber”) (emphasis added).
`The next day, Applied submitted a one-page responsive letter objecting to Demaray’s
`procedurally improper letter, explaining that if Demaray sought leave to amend its answer to assert
`infringement claims, it needed to do so through a properly noticed motion pursuant to the Local
`Rules. Dkt. No. 128. Applied further reasoned that the matter, unlike other disputes raised in this
`case, had not yet been referred to Magistrate Judge Cousins.
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`II.
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`LEGAL ARGUMENT
`Demaray’s letter brief should be stricken – as it is procedurally improper and prejudices
`Applied’s ability to substantively respond.
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`A.
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`Demaray’s Letter Brief is Procedurally Improper
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`A request for leave to amend the pleadings must be filed as a separate motion in compliance
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`with Local Rule 7-1 and not as a letter brief. Doty v. City of Santa Clara, No. 14-CV-03739-LHK,
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`2015 WL 9027727, at *10 (N.D. Cal. Dec. 16, 2015) (denying plaintiff’s request to amend the
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`complaint included in its opposition to defendant’s motion for summary judgment as procedurally
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`improper under L.R. 7-1 and finding it “should have been filed as a separate motion before the
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`Court.”) See also Alatraqchi v. Uber Techs., Inc., No. C-13-03156 JSC, 2013 WL 12469668, at *1
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`(N.D. Cal. Oct. 4, 2013) (denying defendants letter brief requesting the Court strike portions of
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 6 of 7
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`Plaintiff’s amended complaint finding that “Civil Local Rule 7-1(a) provides that ‘[a]ny written
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`request to the Court for an order must be presented by one of the [ ] means [listed one through six.]’
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`A letter to the Court is not one of the listed means.” (brackets in original)).
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`Demaray’s letter brief is further procedurally improper as it neither concerns a discovery
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`dispute nor an issue that has been referred to Magistrate Judge Cousins. See L.R. 7-1(b) (“Motions
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`must be directed to the Judge to whom the action is assigned, except as that Judge may otherwise
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`order.”) The Court has previously referred five motions for Magistrate Judge Cousins’ review
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`regarding discovery and scheduling disputes. See Dkt. Nos. 87, 101. But as Demaray has refused
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`to file a properly noticed motion – this Court has not, and could not have, referred Demaray’s
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`request to Magistrate Judge Cousins for determination.
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`Simply, Demaray’s letter brief is procedurally improper and should be stricken. Any request
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`by Demaray to amend its pleading should be directed to this Court in a noticed and fully briefed
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`motion in compliance with Local Rule 7-1.
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`B.
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`Demaray’s Letter Brief Prejudices Applied’s Ability to Substantively
`Respond
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`Demaray’s request for leave using the letter briefing process improperly seeks to limit
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`Applied’s ability to respond with no declarations or exhibits absent leave of Court pursuant to
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`Magistrate Cousins’ discovery dispute procedures. Applied is entitled, and should be permitted, to
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`fully brief whether Demaray should be granted leave to amend its answer – including citations to
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`evidence supporting why the factors governing amendment weigh against granting leave. For
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`example, Applied intends to submit Demaray’s infringement contentions in its customer suits over
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`the past year where it has already accused Applied’s Cirrus chamber of infringement, including
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`through four supplementations. Applied intends to also submit the technical documents that have
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`been in Demaray’s possession for months relating to the Cirrus chamber, which refute Demaray’s
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`Case 5:20-cv-09341-EJD Document 130 Filed 03/02/22 Page 7 of 7
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`assertion that “Applied misled Demaray and the Texas Court by misrepresenting its filters as low-
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`pass and refusing to provide discovery on the subject – even in the face of multiple orders to compel
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`that were never complied with.” Dkt. No. 127 at 2.
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`Further, pursuant to Magistrate Judge Cousins’ Civil Standing Order, Applied’s response
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`to Demaray’s letter brief would be limited to two pages, compared to the twenty-five pages Applied
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`is entitled to fully brief the issues in response to a properly noticed motion. See L.R. 7-3(a).
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`Demaray’s refusal to comply with this Court’s Local Rules and file a properly noticed motion
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`significantly impairs Applied ability to substantively address why Demaray’s request for leave to
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`amend should be denied. Demaray’s bad faith and undue delay, as well as the prejudice to Applied,
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`need to be considered and fully addressed.
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`III. CONCLUSION
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`Based on the foregoing, Applied respectfully requests that Demaray’s letter brief be
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`disregarded and stricken as procedurally improper and prejudicial to Applied.
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`DATED: March 2, 2022
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`YAR R. CHAIKOVSKY
`PHILIP OU
`MATTHIAS KAMBER
`JOSEPH J. RUMPLER, II
`DAVID OKANO
`ANDY LEGOLVAN
`BORIS LUBARSKY
`PAUL HASTINGS LLP
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`By: /s/ Yar R. Chaikovsky
`YAR R. CHAIKOVSKY
`Attorneys for Plaintiff
`APPLIED MATERIALS
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