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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 1 of 12
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`IRELL & MANELLA LLP
`Morgan Chu (70446)
`MChu@irell.com
`Benjamin W. Hattenbach (186455)
`BHattenbach@irell.com
`Samuel K. Lu (171969)
`SLu@irell.com
`Olivia L. Weber (319918)
`OWeber@irell.com
`1800 Avenue of the Stars, Suite 900
`Los Angeles, California 90067-4276
`Telephone: (310) 277-1010
`Facsimile:
`(310) 203-7199
`
`FOLIO LAW GROUP PLLC
`C. Maclain Wells (221609)
`Maclain@foliolaw.com
`2376 Pacific Ave.
`San Francisco, CA 94115
`(415) 562-8632
`
`Attorneys for Defendant
`DEMARAY LLC
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`APPLIED MATERIALS, INC.,
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`Plaintiff,
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`DEMARAY LLC,
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`vs.
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`Defendant.
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`11074610
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`Case No. 5:20-cv-09341-EJD
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`DEMARAY LLC'S NOTICE OF MOTION
`AND MOTION TO AMEND ITS ANSWER
`TO ADD AFFIRMATIVE
`COUNTERCLAIMS FOR
`INFRINGEMENT
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`Hearing Date: September 29, 2022
`Hearing Time: 9 a.m.
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
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`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 2 of 12
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`TO THE COURT AND ALL PARTIES AND THEIR COUNSEL OF RECORD:
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`PLEASE TAKE NOTICE THAT on September 29, 2022, at 9 a.m., or as soon thereafter
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`as may be heard, Defendant Demaray LLC ("Demaray") shall and hereby does move for an order
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`granting leave to amend Demaray's Answer (Dkt. 66 "Answer") to add affirmative counterclaims
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`for infringement of U.S. Patent Nos. 7,544,276 (the "'276 patent") and 7,381,657 (the "'657
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`patent") (collectively, the "Demaray Patents"). This Motion is based upon this Notice of Motion,
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`the accompanying Memorandum of Points and Authorities included herewith, the Local Rules and
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`Local Patent Rules, the files, records, and pleadings in this case, such evidence and argument as
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`may be proffered at the hearing of this Motion, and any other matters that the Court deems
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`Respectfully submitted,
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`Irell & Manella LLP
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`By: /s/ Samuel K. Lu
`Samuel K. Lu
`Attorneys for Defendant
`DEMARAY LLC
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`appropriate.
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`Dated: March 9, 2022
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`11074610
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`- i -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
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`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 3 of 12
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`TABLE OF CONTENTS
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`Page
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`PRELIMINARY STATEMENT ......................................................................................... 1
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`BACKGROUND ................................................................................................................. 1
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`LEGAL STANDARD ......................................................................................................... 4
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`ARGUMENT ...................................................................................................................... 5
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`A.
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`B.
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`No Prejudice and No Futility .................................................................................. 5
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`No Undue Delay and No Bad Faith ........................................................................ 6
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`V.
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`CONCLUSION ................................................................................................................... 7
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`I.
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`II.
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`III.
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`IV.
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`11074610.
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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 4 of 12
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`Cases
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`TABLE OF AUTHORITIES
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`Page(s)
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`DCD Programs Ltd. v. Leighton,
`833 F.2d 183 (9th Cir. 1987) ................................................................................................4, 5, 6
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`Demaray LLC v. Intel Corp.,
`Case No. 6:20-cv-00634 (W.D. Tex.) ..........................................................................................2
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`Demaray LLC v. Samsung Electronics, Co., et al.,
`Case No. 6:20-cv-00636 (W.D. Tex.) ..........................................................................................2
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`Doe I v. Cisco Systems, Inc.,
`No. 11-cv-02449-EJD, 2013 WL 5272923 (N.D. Cal. Sept. 18, 2013) .......................................4
`
`Eminence Cap. LLC v. Aspeon, Inc.,
`316 F.3d 1048 (9th Cir. 2003) ..................................................................................................4, 5
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`Finjan. Inc. v. Blue Coat Sys., Inc.,
`No. 13-cv-03999-BLF, 2014 WL 6626227 (N.D. Cal. Nov. 20, 2014) .......................................4
`
`Gaby’s Bags, LLC v. Mercari, Inc.,
`No. C 20-00734, 2020 WL 4464897 (N.D. Cal. Aug. 3, 2020) ...............................................5, 6
`
`Griggs v. Pace Am. Grp., Inc.,
`170 F.3d 877 (9th Cir. 1999) ........................................................................................................5
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`Hynix Semiconductor Inc. v. Toshiba Corp.,
`No. C-04-04708 VRW, 2006 WL 3093812 (N.D. Cal. Oct. 31, 2006) .......................................6
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`Illumina Inc. v. BGI Genomics Co., Ltd.,
`No. 20-cv-01465-WHO, 2021 WL 428632 (N.D. Cal. Feb. 8, 2021)..........................................6
`
`Jackson v. Bank of Hawaii,
`902 F.2d 1385 (9th Cir. 1990) ......................................................................................................5
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`Oracle Am., Inc. v. Hewlett Packard Enter. Co.,
`No. 16-cv-01393 2017 WL 3149297 (N.D. Cal. July 25, 2017) ..............................................6, 7
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`Pac. Sci. Energetic Materials Co. LLC v. Ensign-Bickford Aero. & Def. Co.,
`281 F.R.D. 358 (D. Ariz. 2012) ...................................................................................................7
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`Statutes
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`35 U.S.C. § 271(f) ..............................................................................................................................2
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`Rules
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`Fed. R. Civ. P. 11 ...............................................................................................................................7
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`11074610.
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`- iii -
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`Fed. R. Civ. P. 15 .......................................................................................................................4, 5, 6
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`Fed. R. Civ. P. 15(a) ...................................................................................................................4, 5, 7
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`Fed. R. Civ. P. 16(a) ...........................................................................................................................4
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`11074610
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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 6 of 12
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`MEMORANDUM OF POINTS AND AUTHORITIES
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`I.
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`PRELIMINARY STATEMENT
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`Demaray moves to amend its Answer to add affirmative counterclaims for infringement of
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`the '276 and '657 Patents. It is readily entitled to leave to amend because the case there is no
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`governing case schedule yet, fact discovery is in its beginning stages, and most critically, there
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`would be no prejudice to Applied from this amendment (indeed, Applied's claims against Demaray
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`in this case are claims of non-infringement for the same two patents). Moreover, Demaray has
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`diligently sought to amend its Answer to add affirmative counterclaims in good faith.
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`Demaray's proposed Amended Answer and Counterclaims ("Amended Answer") is attached
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`as Exhibit 1, and a redline version is attached as Exhibit 2. With these new allegations, Demaray's
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`proposed Amended Answer states claims that are more than plausible for willful infringement of
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`the Demaray Patents. Accordingly, Demaray respectfully requests the Court to grant the requested
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`leave.
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`II.
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`BACKGROUND
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`Applied filed this case against Demaray, seeking a declaratory judgement that none of its
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`stand-alone reactors infringe the Demaray Patents. Dkt. 1. It is uncontested that the Demaray
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`Patents are directed at particular reactor configurations requiring, inter alia, the use of "a narrow
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`band-rejection filter" to protect the DC power source from damaging feedback from the RF bias.
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`See, e.g., '276 Patent, claim 1. It is also uncontested that the configuration details of Applied's
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`reactors are not publicly available. See Ex. 3, Applied Materials Inc.'s First Supp. Obj. and Resp.
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`to Defendant Demaray LLC's Interrogatories (designating Applied's interrogatory responses
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`concerning its reactors "CONFIDENTIAL – OUTSIDE COUNSEL EYES ONLY").1 And while
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`Applied has repeatedly asserted that its reactors lack a narrow band rejection filter (Dkt. 1
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`("Cmplt.") ¶¶ 95, 100), Applied has failed to produce documents substantiating its assertions. Dkt.
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`118 at 1-2.
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`As Demaray has consistently explained, Demaray needs targeted information about
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`1 All references to "Ex. __" herein shall be to the exhibits to the Weber Declaration,
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`attached hereto.
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`11074610
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`- 1 -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-009341-EJD)
`
`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 7 of 12
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`Applied's reactors to make affirmative infringement determinations, including circuit-level details
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`on any protective filters (or alternative protective mechanisms used, if any). See, e.g., Dkts. 27 at
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`6-8, 69 at 3-4, 82 at 4-8, 118 at 1-3. But at every turn, Applied has refused to disclose these
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`necessary details and, in fact, has repeatedly denied the existence of such filters. Cmplt. ¶¶ 95,
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`100.
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`As outlined in the most-recent Joint CMC Statement, Demaray proposed that Applied
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`prioritize providing Targeted Product Disclosures sufficient to detail (1) its reactors with DC
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`power to the target and RF bias to the substrate (including reactor configurations, power sources,
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`magnetron usage, and heating elements), (2) any RF filters or alternative protective mechanisms
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`used with those reactors (including the type of RF filter or alternative protective mechanism, the
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`operating frequency, and the attenuated bandwidth), (3) Applied's use of such reactors (including
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`the targets and substrates used and the thin-films deposited), (4) Applied's interactions with its
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`customers regarding the same (e.g., to address indirect infringement issues), and (5) Applied's
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`importation and exportation to reactors and chamber parts sufficient to address its activities abroad
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`(e.g., under 35 U.S.C. § 271(f)). Dkt. 106 at 11-13 (Third Updated CMC Statement). Applied
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`refused, which in turn required Demaray to file a motion to compel, which is still pending. See
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`Dkt. 118.
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`Demaray has also served discovery on Applied requesting this information, but again,
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`Applied refused to provide full responses, supporting documents or components for inspection and
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`testing. Dkt. 118 at 2. In addition, Applied has maintained in co-pending Texas cases2 that,
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`although certain of its reactors have a RF filter, the RF filter in those reactors is purportedly a low-
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`pass filter as opposed to the claimed narrow band rejection filter. Ex. 5, 9/27/2022 Tr. 48:1-6.3
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`For example, the Texas defendants—who share counsel with Applied—represented to the Texas
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`court during claim construction that "Applied Materials produced[] a document . . . which is the
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`2 See Demaray LLC v. Intel Corp., Case No. 6:20-cv-00634 (W.D. Tex.); Demaray LLC v.
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`Samsung Electronics, Co., et al., Case No. 6:20-cv-00636 (W.D. Tex.).
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`3 All references to "Tr." refer to the reporter's transcript of proceedings in the co-pending
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`Texas cases. See supra at 2 n.2.
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`11074610
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`- 2 -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
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`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 8 of 12
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`only document showing that there's a reactor having a filter. And it doesn't have a narrow band
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`rejection filter. It's got a low band pass filter." Ex. 6, 8/27/2021 Tr. 44:12-16. Despite
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`presumably having a basis for this assertion to the Texas court, Applied refused both in this case
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`and in the Texas cases to disclose the details of the protective filter, or the full facts underlying the
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`representations made to the Texas court—claiming that it does not have details on such filters.
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`Ex. 4, 11/04/2021 Tr. 9:2-6.
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`Because Applied refused to disclose the details of the protective filter, Demaray was forced
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`to incur additional expense and delay when it subpoenaed Applied's filter supplier in the Texas
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`cases, Comet Technologies USA, Inc. ("Comet"). Specifically, Demaray subpoenaed Comet
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`concerning the DC filter supplied for certain Applied reactor chambers so that Demaray could test
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`Applied's representations regarding the filter circuitry and operation. Such third party discovery
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`revealed that Applied's representations to Demaray and to the Texas court were, in fact,
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`inaccurate.
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` On December 17, 2021, Comet informed Demaray that "COMET built this
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`component at Applied's request and according to Applied's specifications," belying
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`Applied's feigned ignorance that it lacked details concerning such filters.
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` On January 19, 2022, Comet provided a circuit-level schematic that revealed the
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`use of a narrow band rejection filter—also directly contrary to Applied's prior
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`representations to the Texas court that "it doesn't have a narrow band rejection
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`filter. It's got a low band pass filter." Ex. 6, 8/27/2021 Tr. 44:12-16.
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` On February 4, 2022, Demaray confirmed through visual inspection and testing at
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`Comet's facility that the circuit described in the schematics was indeed
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`substantively accurate and that a narrow band rejection filter is present in the
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`Comet component.
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`Given the information that Demaray uncovered (and only through third-party discovery), Demaray
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`has a good faith reasonable basis for bringing infringement claims here, despite Applied's
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`assertions that its reactors lack a narrow band rejection filter.
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`On February 7, 2022, the very next business day after the inspection at Comet's facility,
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`11074610
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`- 3 -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
`
`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 9 of 12
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`Demaray filed a letter brief before Judge Cousins requesting leave to amend to add its
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`infringement counterclaims. Demaray made this request to Judge Cousins in light of the fact that
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`its proposed amendment related to scheduling issues and a motion for targeted discovery currently
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`pending before Judge Cousins. See Dkt. 127.
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`Applied opposed Demaray's letter brief (on both procedural and substantive grounds), Dkt.
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`128, and subsequently filed a motion to strike Demaray's letter brief on Thursday March 3, 2022,
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`Dkt. 130. In particular, Applied "requests the Court decline to address Demaray's letter brief and
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`instruct Demaray to file a noticed motion in compliance with this Court's rules." Dkt. 128. While
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`Demaray believes that its letter brief was procedurally proper, to avoid burdening the Court with
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`deciding Applied's motion to strike, concurrently with the filing of the instant brief, Demaray
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`withdraws its letter brief in favor of this motion to amend.
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`Demaray is prepared to file an amended Answer and Counterclaims at the Court's
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`direction.
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`III. LEGAL STANDARD
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`Federal Rule of Civil Procedure 15 provides that a party may amend its pleading by leave
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`of court and that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P.
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`15(a)(2).4 The Ninth Circuit applies this rule "with extreme liberality." Eminence Cap. LLC v.
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`Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003); see also DCD Programs Ltd. v. Leighton, 833
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`F.2d 183, 186 (9th Cir. 1987) ("[R]ule 15's policy of favoring amendments to pleadings should be
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`applied with 'extreme liberality'").
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`Under this liberal standard for granting leave to amend, the Ninth Circuit instructs courts to
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`grant leave unless the amendment: "(1) would cause prejudice to the opposing party, (2) is sought
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`in bad faith, (3) creates undue delay, (4) or is futile." Doe I v. Cisco Systems, Inc., No. 11-cv-
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`02449-EJD, 2013 WL 5272923, at *1 (N.D. Cal. Sept. 18, 2013) (citing Chudacoff v. Univ. Med.
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`4 Because a court-issued deadline for amending pleadings has not been entered (and so has
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`not yet passed), Fed. R. Civ. Proc. 16(b)'s "good cause" standard does not apply. See Finjan. Inc.
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`v. Blue Coat Sys., Inc., No. 13-cv-03999-BLF, 2014 WL 6626227, at *1 (N.D. Cal. Nov. 20, 2014).
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`Instead, the more lenient Rule 15 standard applies. Doe I, 2013 WL 5272923, at *1.
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`11074610
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
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`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 10 of 12
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`Ctr. Of S. Nev., 649 F.3d 1143, 1153 (9th Cir. 2011)); see also Griggs v. Pace Am. Grp., Inc., 170
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`F.3d 877, 880 (9th Cir. 1999) (noting that "this determination should be performed with all
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`inferences in favor of granting the motion").
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`These factors are not weighed evenly: "[a]bsent prejudice, or a strong showing of the
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`remaining factors, there exists a presumption under Rule 15(a) in favor of granting leave to
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`amend." Gaby's Bags, LLC v. Mercari, Inc., No. C 20-00734, 2020 WL 4464897, at *2 (N.D. Cal.
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`Aug. 3, 2020) (quoting Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.
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`2013)). Of the four factors, "it is the consideration of prejudice to the opposing party that carries
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`the greatest weight." Eminence Capital, 316 F.3d at 1052. The non-movant bears the burden of
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`showing prejudice. DCD Programs, 833 F.2d at 187.
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`IV. ARGUMENT
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`Based upon Applied's third-party supplier's recent disclosures and Demaray's subsequent
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`inspection and testing of the claimed narrow band rejection filter at Applied's own supplier's
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`facility, Demaray seeks to add affirmative counterclaims for infringement. The case is in its early
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`stages; there is no case schedule yet, and discovery just commenced. Accordingly, under the
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`liberal Rule 15 standard and the Foman factors, the Court should grant Demaray leave to add
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`counterclaims for infringement.
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`A.
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`No Prejudice and No Futility
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`Taking the "most important factor" first, Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387
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`(9th Cir. 1990), allowing Demaray to amend its Answer to add affirmative counterclaims of
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`infringement would cause no prejudice to Applied. The Court has yet to conduct a case
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`management conference or enter a case schedule. Discovery is ongoing, and briefing on claim
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`construction has not started and can easily be adjusted per Demaray's proposed schedule (Dkt.
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`116) to accommodate its affirmative infringement claims. And Demaray's counterclaims for
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`infringement of the Demaray Patents are the mirror-image of Applied's claims for declaratory
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`judgments of non-infringement of those same patents.
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`In cases far more advanced than the proceedings here, courts have found no prejudice to
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`the non-moving party even when it was necessary to adjust the case schedule or expand discovery.
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
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`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 11 of 12
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`See, e.g., Illumina Inc. v. BGI Genomics Co., Ltd., No. 20-cv-01465-WHO, 2021 WL 428632, at
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`*3 (N.D. Cal. Feb. 8, 2021) (finding no significant prejudice to the plaintiff by allowing the
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`defendant to amend its answer when it requested to do so on the last possible day under Rule 15,
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`which would impose additional costs and discovery on the plaintiff); Oracle Am., Inc. v. Hewlett
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`Packard Enter. Co., No. 16-cv-01393 2017 WL 3149297, at *3 (N.D. Cal. July 25, 2017) (noting
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`that the "proposed amendments, while expanding the scope of discovery and of the case, hardly
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`present new theories of liability that take [the defendant] by surprise.").
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`Applied has known of Demaray's likely assertion of counterclaims since the first Joint
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`CMC Statement. And although Applied has already suggested that Demaray should have already
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`brought its claims based on Texas disclosures (Dkt. 128 at 1), that suggestion ignores Applied's
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`own actions in which it repeatedly denied having the claimed narrow band rejection filter at issue
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`in the Texas disclosures. Indeed, Applied has alleged here that its reactors lack the claimed
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`"narrowband rejection-filter." Dkt. 1, ¶¶ 95, 100. Applied cannot now claim prejudice based on
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`the fact that Demaray diligently sought to test Applied's and the Texas defendants' assertions, and
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`sought leave to amend as soon as it had inspected and tested the relevant components at Applied's
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`filter supplier's facility. Prejudice is also lacking when the case is still in its very early stages
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`Nor would amendment be futile. Applied cannot show that it "appears beyond doubt"
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`(DCD Programs, 833 F.2d at 188) that "amendment would eventually be dismissed for failure to
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`state a claim." Gaby's Bags, 2020 WL 4464897, at *3. Indeed, amendment is "futile only if no set
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`of facts can be proved under the amendment which would constitute a valid claim or defense."
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`Hynix Semiconductor Inc. v. Toshiba Corp., No. C-04-04708 VRW, 2006 WL 3093812, at *2
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`(N.D. Cal. Oct. 31, 2006) (emphasis added). As set forth in the proposed amended pleadings,
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`Demaray has more than adequately pleaded allegations of patent infringement and willfulness.
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`B.
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`No Undue Delay and No Bad Faith
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`As explained above, Demaray has been diligent in seeking leave to amend and does not
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`seek amendment in bad faith. See generally Illumina, 2021 WL 428632, at *3 (finding that the
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`defendant acted diligently in seeking leave to amend its affirmative defenses, even despite a lapse
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`- 6 -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
`
`

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`Case 5:20-cv-09341-EJD Document 133 Filed 03/09/22 Page 12 of 12
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`of seven months between production of the relevant documents and filing of the defendant's
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`motion); Oracle, 2017 WL 3149297, at *4 (no undue delay even though the basis for some
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`allegations had arisen over six months before filing of a motion for leave).
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`As noted above, Applied alleged here and also contended in the Texas cases that its
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`representative chambers did not contain the claimed narrow band rejection filter. Demaray has
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`consistently sought Targeted Product Disclosures to test these assertions, including circuit-level
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`details regarding Applied's protective filters to evaluate affirmative infringement issues. See, e.g.,
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`Pac. Sci. Energetic Materials Co. LLC v. Ensign-Bickford Aero. & Def. Co., 281 F.R.D. 358, 363
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`(D. Ariz. 2012) ("Erring on the side of avoiding Rule 11 sanctions at the risk of waiving its
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`counterclaim, the defendant diligently sought discovery of technical documentation to support its
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`claim of infringement…I FIND good cause to…allow the defendant to amend its answer and file a
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`Applied not only refused to provide these disclosures, but affirmatively claimed it used a
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`low-pass filter and not a narrow band rejection-filter while its counsel repeatedly asserted that it
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`would be a violation of Rule 11 for Demaray to claim otherwise. The Texas court granted three
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`motions to compel to obtain the actual filter details, which details were never provided by
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`Applied. And now, Comet's disclosures reveal that the filter details directly contradict Applied's
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`earlier representations. Accordingly, now that Demaray has circuit-level filter details and has
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`confirmed those details via inspection, it has a good faith basis to add affirmative infringement
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`claims on certain of Applied's stand-alone reactors.
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`V.
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`CONCLUSION
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`For the foregoing reasons, consistent with Fed. R. Civ. Proc. 15(a)(2) and the Ninth
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`Circuit's liberal approach to amendment of pleadings, the Court should grant Demaray's motion to
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`amend.
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`Dated: March 9, 2022
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`Respectfully submitted,
`IRELL & MANELLA LLP
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`By: /s/ Samuel K. Lu
`Samuel K. Lu
`Attorneys for Defendant DEMARAY LLC
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`- 7 -
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`DEMARAY'S NOTICE OF MOTION AND
`MOTION TO AMEND
`(Case No. 5:20-cv-09341-EJD)
`
`11074610
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