Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 1 of 6
`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 1 of 6
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`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 2 of 6
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`From:
`To:
`Cc:
`Subject:
`Date:
`Attachments:
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`Wells, Maclain
`Ou, Philip
`#Demaray Service [Int]; Demaray - AMAT
`[EXT] Applied Materials, Inc. v. Demaray LLC, 5:20-cv-09341-EJD
`Tuesday, February 1, 2022 5:46:00 PM
`Demaray_s Motion to Add Affirmative Infringement Claims (v2).DOCX
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`Phil,
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`We will be moving the NDCA court for permission to amend Demaray’s Answer to include
`affirmative counterclaims for infringement. We understand from past correspondence that you
`oppose. Here is our portion of the draft submission. Please provide Applied’s inserts by 3 pm on
`Friday. We are available to discuss tomorrow.
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`Thank you,
`Maclain
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`PLEASE NOTE: This message, including any attachments, may include privileged,
`confidential and/or inside information. Any distribution or use of this communication by
`anyone other than the intended recipient(s) is strictly prohibited and may be unlawful. If you
`are not the intended recipient, please notify the sender by replying to this message and then
`delete it from your system. Thank you.
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`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 3 of 6
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`February __, 2022
`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
`Re:
`Applied Materials, Inc. v. Demaray LLC, 20-cv-09341-EJD (N.D. Cal.)
`Dear Judge Cousins,
`Demaray LLC (“Demaray”) and Applied Materials, Inc. (“Applied”) submit this joint letter to
`resolve a dispute regarding Demaray’s request to amend its Answer to add affirmative claims for
`infringement to this case. The parties met and conferred, were unable to resolve their dispute, and
`are available for a hearing on February 10 or at the Court’s earliest convenience
`Demaray LLC’s Statement
`Demaray moves to add affirmative infringement claims concerning Applied’s reactors. Demaray
`recently received third-party discovery from Applied’s filter supplier and has diligently analyzed
`this information and has a good-faith basis to allege that Applied’s stand-alone reactors are
`infringing. Demaray is ready to address these claims via an amended Answer and Counterclaims,
`although it still needs targeted discovery to ascertain the full scope of infringement and prepare
`preliminary infringement contentions. See Dkt. 118. Demaray has requested amendment at the
`earliest opportunity so that the Court may consider this request while it enters a case schedule.
`A.
`Background
`Applied has sought a declaratory judgement that none of its stand-alone reactors, or its use
`thereof, 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.
`As Demaray has repeatedly informed the Court, Demaray therefore needs targeted discovery on
`Applied’s reactors to make affirmative infringement determinations on Applied’s stand-alone
`reactors in this case, including circuit-level details on any protective filters or alternative
`protective mechanisms used. See, e.g., Dkts. 27 at 6-8, 69 at 3-4, 82 at 4-8, 118 at 1-3.
`At every turn, Applied has refused to disclose these necessary details. As outlined in the most-
`recent Joint CMC Statement, Demaray proposed that Applied prioritize providing Targeted
`Product Disclosures sufficient to detail (1) its reactors with DC power to the target and RF bias
`to the substrate (including reactor configurations, power sources, magnetron usage, and heating
`elements), (2) any RF filters or alternative protective mechanisms used (including the type of RF
`filter/alternative protective mechanism, operating frequency, and attenuated bandwidth), (3)
`Applied’s use of such reactors (including the targets and substrates used and thin-films
`deposited), (4) its interactions with customers regarding the same (e.g., to address indirect
`infringement issues), and (5) its importation and exportation to reactors and chamber parts
`sufficient to address its activities abroad (e.g., under 35 U.S.C. § 271(f)). Dkt. 106 at 11-13
`(Third Updated CMC Statement). Applied refused, requiring a motion to compel. See Dkt. 118.
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`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 4 of 6
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`Demaray also served discovery on Applied in this case asking for these Targeted Product
`Disclosures, but Applied refused to provide full responses, related documents or the relevant
`reactor components for inspection and testing. For 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 refused here and in Texas to disclose the details of the protective filters or alternative
`protective mechanisms used in its reactors, claiming that it does not have details on such filters.
`Demaray subpoenaed Applied’s filter supplier, Comet Technologies USA, Inc. (“Comet”),
`concerning the DC filter supplied for certain Applied reactor chambers. On December 17, 2021,
`Comet stated that “COMET built this component at Applied’s request and according to
`Applied’s specifications” belying Applied’s feigned ignorance. On January19, 2022, Comet
`provided a circuit-level schematic confirming the use of a band-rejection filter inside the RF
`match supplied to Applied. On January 26, 2022, Comet provided further detail about inductive
`components in this DC filter, including coil specifications. On February 4, 2022, Demaray
`visually inspected and tested the DC filter at Comet’s facility. Demaray now seeks to add
`affirmative infringement claims concerning Applied’s reactors and is prepared to file an
`amended Answer and Counterclaims at the Court’s direction. Of note, Demaray still seeks
`targeted disclosures regarding these and Applied’s other reactors (see Dkt. 118) to prepare its
`infringement contentions addressing the full-scope of Applied’s infringement.
`B.
`Argument
`Based upon Comet’s recent disclosures, Demaray seeks to add affirmative counterclaims for
`infringement. Under Fed. R. Civ. P. 15(a)(2), the Court should “freely give leave when justice so
`requires.” “Courts presented with motions for leave to amend a pleading to add an omitted
`counterclaim generally ‘adhere [] to the liberal amendment policy of Rule 15’ in deciding
`whether to grant the requested leave.” Kawczynski v. Kawczynski, No. 18-cv-05709 NC, 2019
`U.S. Dist. LEXIS 239238, at *2-3 (N.D. Cal. Mar. 25, 2019) (quotations omitted). The factors
`informing whether amendment is warranted are: (1) bad faith, (2) undue delay, (3) prejudice to
`the opposing party, and (4) futility of amendment. Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct.
`227, 9 L. Ed. 2d 222 (1962). The party opposing amendment bears the burden of showing
`prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). Here, Rule 15
`and the Foman factors favor granting Demaray leave to add counterclaims for infringement.
`Demaray neither seeks amendment in bad faith nor has unduly delayed. Demaray appropriately
`and consistently told Applied and this Court that it needs targeted disclosures, including circuit-
`level details regarding Applied protective filters to evaluate the propriety of affirmative
`infringement claims. See, e.g., Pac. Sci. Energetic Materials Co. LLC v. Ensign-Bickford Aero.
`& 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…I
`FIND good cause to amend the scheduling order to allow the defendant to amend its answer and
`file a counterclaim.”). Demaray recently received circuit-level details on the protective filter used
`in a subset of Applied’s Cirrus reactors. Based on its review of these schematics (produced
`January 19), disclosures on the inductive members (produced January 26) and inspection of
`Comet’s DC filter (conducted February 4), Demaray has a good faith, reasonable basis to add
`affirmative infringement claims regarding Applied’s stand-alone reactors. In particular, it has
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`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 5 of 6
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`reason to believe that Comet’s filter contains a claimed narrowband rejection filter. Demaray
`seeks to amend at the earliest possibility to allow the Court to consider this request while it
`decides Demaray’s motion for targeted disclosures and enters a case schedule.
`Applied will not be prejudiced by amendment. The Court has yet to conduct a case management
`conference or enter a case schedule. Discovery is in its early stages and briefing on claim
`construction has not started and can easily be adjusted per Demaray’s proposed schedule (Dkt.
`116) to accommodate affirmative infringement claims. And, Applied’s suggestion that Demaray
`should have brought its claims based on Texas disclosures ignores its own actions. Applied
`stated it’s reactors lack the claimed “narrowband rejection-filter” (Dkt. 1, ¶¶ 95, 100), but
`refused in Texas and here to provide details necessary for Demaray to test this assertion. On
`September 27, 2021, the Texas court granted Demaray’s motions to compel the Texas defendants
`and Applied to provide more details on the RF filters/alternative protective mechanisms in the
`Texas defendants’ reactors, including requiring physical inspections of the filters/alternative
`protective mechanisms, providing parts (such as the filter and DC power sources) for inspection,
`and requesting details from their power source suppliers. The Texas defendants and Applied
`failed to comply necessitating another motion to compel. The Texas court granted this motion on
`November 4, 2021 and ordered Applied to provide representative reactors for inspection. Again,
`the Texas defendants and Applied failed to do so, requiring another motion to compel. At a
`December 16, 2021 hearing, the Texas court ordered the requested disclosures, including
`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
`The Court should grant Demaray’s motion to add affirmative claims for infringement based on
`its diligent inquiry and recent discovery of information relating to the DC filters that non-party
`Comet supplies to Applied for Cirrus reactors. Demaray has prepared an amended Answer with
`Counterclaims that it is ready to file. Demaray also requests the Court to order the requested
`targeted disclosures (Dkt. 118) so that it can ascertain the full scope of Applied’s infringement.
`Applied’s Statement
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`Applied’s Proposal
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`Respectfully submitted,
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`/s/
`C Maclain Wells
`of Irell and Manella LLP
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`Counsel for Defendant
`Demaray LLC
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`Case 5:20-cv-09341-EJD Document 142-10 Filed 03/23/22 Page 6 of 6
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`Respectfully submitted,
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`/s/
`Philip Ou
`of PAUL HASTINGS LLP
`Counsel for Plaintiff
`Applied Materials, Inc.
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