Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 1 of 7 PageID #: 18457
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`ELM 3DS INNOVATIONS, LLC, a
`Delaware limited liability company,
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`v.
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`SAMSUNG ELECTRONICS CO., LTD., a
`Korean business entity,
`SAMSUNG SEMICONDUCTOR, INC., a
`California corporation,
`SAMSUNG ELECTRONICS AMERICA,
`INC., a New York corporation, and
`SAMSUNG AUSTIN SEMICONDUCTOR,
`LLC, a Delaware limited liability company,
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`Plaintiff,
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`Defendants.
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`LETTER TO THE HONORABLE JENNIFER L. HALL FROM
`ADAM W. POFF REGARDING DEFENDANTS’ RESPONSE TO
`PLAINTIFF’S FEBRUARY 13, 2020 DISCOVERY LETTER (D.I. 254)
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`C.A. No. 14-1430-LPS
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`YOUNG CONAWAY STARGATT &
`TAYLOR, LLP
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`Adam W. Poff (No. 3990)
`Pilar G. Kraman (No. 5199)
`Rodney Square
`1000 North King Street
`Wilmington, DE 19801
`(302) 571-6600
`apoff@ycst.com
`pkraman@ycst.com
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`Attorneys for Defendants Samsung Electronics
`Co., Ltd., Samsung Semiconductor, Inc.,
`Samsung Electronics America, Inc., and
`Samsung Austin Semiconductor, LLC
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`Dated: February 18, 2020
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`OF COUNSEL:
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`Allan M. Soobert
`Naveen Modi
`Phillip W. Citroën
`PAUL HASTINGS LLP
`875 15th Street, N.W.
`Washington, D.C. 20005
`(202) 551-1700
`(202) 551-1705 (fax)
`allansoobert@paulhastings.com
`naveenmodi@paulhastings.com
`phillipcitroen@paulhastings.com
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`26050332.1
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`REDACTED - PUBLIC VERSION
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`Redacted Version: February 25, 2020
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 2 of 7 PageID #: 18458
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`Dear Magistrate Judge Hall:
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`The Samsung Defendants (“Samsung”) respectfully respond to the February 13, 2020
`letter from Plaintiff Elm. Elm’s letter mischaracterizes the discovery conducted to date, is
`largely moot and was unnecessary from the outset. Samsung produced virtually all the requested
`discovery. The only unresolved issue remaining is on foreign sales data that, in effect, double
`counts worldwide component sales already produced. The following issues are moot:
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`(cid:121) Worldwide Component Sales: Samsung produced the requested data.1 See Ex. 1.
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`(cid:121) Identification of Accused Components Made by Samsung Included in Samsung’s
`Downstream Products: Samsung produced the requested data.2 See Ex. 1.
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`(cid:121) U.S. Sales of Downstream Products that Include Third-Party Components: Samsung
`produced the requested data, to the extent it exists at Samsung.3 See Ex. 1.
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`1 The parties first agreed that Samsung would produce a limited set of worldwide sales—those
`with a tie to U.S. sales activities—as a compromise to all worldwide sales. But this compromise
`proved unworkable due to unreasonableness by Elm. Elm continued to demand “all worldwide
`sales of relevant products to any customer who has ever received, in the United States, an email,
`call, or other communication from any Samsung entity.” D.I. 254 at 2. It is impracticable, if not
`impossible, for a company of Samsung’s size to identify every email, call, or communication
`with any customer from 2007 to the present, and tie those activities to relevant products (which
`also required narrowing for thickness and die-stacking requirements). Because Elm refused to
`work in good faith on this compromise, Samsung reverted to producing all worldwide sales for
`the accused products, and asked for reasonable time for production. Ex. G. Yet, the next day,
`Elm inexplicably proceeded with its motion to compel this data, despite there clearly being no
`dispute. Ex. 3. This highlights an unfortunate pattern of abuse of the Court’s discovery process,
`wherein Elm demands immediate productions of voluminous and burdensome discovery by
`repeatedly threatening motion practice, regardless of whether the parties disagree over the issues.
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`2 This request was also never in dispute. First, Samsung’s productions identified downstream
`products in their entirety, on a “product-by-product” basis, as sought by Elm’s interrogatory, and
`were thus fully responsive. See Ex. 4 and 5. Elm’s subsequent request for more data correlating
`over a thousand downstream products to the memory/image sensor components incorporated
`therein was entirely new on December 15, and required time to prepare into a producible format.
`See Ex. 6. Nevertheless, Samsung agreed to prepare this new data for production and diligently
`produced it. Id., Ex. 1. Again, Elm rushed to the Court to complain about this issue when there
`was no dispute (and despite Elm not even seeking this data through a pending interrogatory).
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`3 This request was also never really in dispute. Elm does not deny that Samsung produced
`responsive data for downstream products with memory and image sensor components made by
`Samsung, and Samsung disagrees that Elm’s interrogatory “plainly covers” products with third-
`party components as well. There is no clear reference or suggestion to such third-party products
`in Elm’s interrogatories. See Ex. A and B. Nevertheless, after Elm first raised the issue on
`around December 15, Samsung diligently provided this data thereafter. See Ex. D and Ex. 1.
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 3 of 7 PageID #: 18459
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`(cid:121) Intra-Company Transfer Prices: Samsung produced the requested data. See Ex. 1.4
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`(cid:121) Worldwide Sales of Accused Memory Products That Include Die Made in the U.S.:
`Samsung does not track sales of memory products with wafer products by Samsung
`Austin Semiconductor LLC (SAS),5 and thus produced the next best data from which the
`requested sales can be approximated—average sales prices of accused memory products,
`and production volumes of accused memory products with SAS products. Ex. 7.
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`(cid:121) Purportedly “Incomplete Data”: Samsung produced fully responsive data to the extent it
`exists. Elm improperly characterizes its confusion over this data as deficiencies in
`Samsung’s responses, and should instead seek a deposition of a knowledgeable witness:
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`o SAMSUNG-ELM-000062360 (Ex. 4): Elm’s inability to comprehend why
`certain entries show “net quantities” but no “sales” does not turn them into
`discrepancies or make this spreadsheet incomplete. Nor does Elm’s interrogatory
`seek explanations of specific data entries or individual product sales.
` o SAMSUNG-ELM-000062362 (Ex. 5): Elm’s inability to understand differing
`numbering schemes for downstream products of one business unit as compared to
`component products of another unit does not indicate any discrepancies or support
`its speculation that this spreadsheet incomplete. Nor does Elm’s interrogatory
`seek explanations of product naming conventions or differences in product codes.
`o Pre-2010 data: Elm correctly notes that SEA has not produced sales data from
`before 2010. This does not, however, mean that Samsung “destroyed its pre-2010
`data” as Elm suggests. Samsung has since retrieved pre-2010 sales data but found
`no data responsive to Elm’s request. See Ex. 11. If Samsung becomes aware of
`any responsive data not yet produced, it will timely update Elm accordingly.
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`Elm’s assertion that its interrogatories “generated significant opposition from Samsung”
`is unfounded. D.I. 254 at 1. As shown by its productions, Samsung complied with ambitious
`deadlines and tried to address these issues without burdening the Court, through great diligence
`and efforts over the holidays.6 Elm’s demands for immediate production of additional data,
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`4 This request was also never in dispute. Elm notes that its interrogatories “were not limited,”
`but they do not suggest the inclusion of transfer prices anywhere. Samsung has been producing
`financial data for the accused products for months, yet Elm only asked for the transfer prices for
`these products on December 15, Ex. D, and Samsung diligently produced this data, Ex. G, 1.
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`5 Samsung does not manufacture dies for accused products in the U.S. SAS is Samsung’s U.S.
`subsidiary that makes wafers, which are shipped to Korea for dicing and packaging into dies.
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`6 See Ex. 2 (Samsung’s agreement); Ex. 8 (showing by agreed date of January 10 productions of:
`SEA’s sales of downstream products containing accused memory and image sensor components;
`SELA-Miami’s sales of downstream products containing accused memory and image sensor
`components; SEC’s worldwide sales of image sensor components containing SAS products.)
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 4 of 7 PageID #: 18460
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`under repeated threats of this motion, are unreasonable under the circumstances. It is also
`inappropriate for Elm to needlessly bring these issues to the Court, when Samsung agreed to
`produce the requested discovery and largely did so by its target February 14 date. Ex. G. And,
`Elm cannot credibly allege that the nine issues listed in its letter required the Court’s assistance
`to resolve. See Techno View IP, Inc. v. Facebook Technologies, LLC et al., No. 1-17-cv-00386
`(D. Del. Nov. 21, 2017) (where the parties also raised 9 discovery disputes, the Court “has never
`seen a matter in which parties had this many unresolved [disputes],” giving it “concern as to
`whether the parties have fully satisfied their responsibility . . . to make a good faith effort to
`resolve such disputes before bringing them to the Court.”). Elm’s tactics are not consistent with
`its obligation to make good faith efforts to resolve discovery matters. D.I. 111 at 10.
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`Foreign Sales For Downstream Products: With regard to the sole issue that remains
`unresolved, Elm’s complaints are without merit. Contrary to Elm’s incorrect assertion, Samsung
`never agreed to produce foreign sales for downstream products (e.g., phones). See Ex. 2
`(Samsung’s discovery agreement). The accused component products are memory/image sensor
`components (chips), which can be incorporated in downstream products. Samsung agreed to
`produce worldwide sales for those components and has already done so. See id. Samsung also
`produced U.S. sales for downstream products incorporating such components. Samsung is not
`aware of any legitimate basis, under WesternGeco or otherwise, for Elm to double count units by
`obtaining both worldwide component sales and foreign sales of the downstream products having
`such components. Elm has not explained how this data could lead to admissible evidence.
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`To the extent Elm points to SAS’s wafer products made in the U.S., Samsung produced
`all worldwide sales for accused components containing SAS wafer products. Ex. 1 and 7. Elm
`has no basis to seek worldwide sales for downstream products that incorporate the same accused
`components containing SAS wafer products. Such a request is prohibited by patent exhaustion.
`See Impression Prods. v. Lexmark Int’l, Inc., 137 S. Ct. 1523, 1527 (2017) (finding exhaustion
`from foreign sales); Quanta Computer, Inc. v. LG Elecs., Inc., 128 S. Ct. 2109, 2122 (2008).
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`While Samsung produced U.S. sales for both (1) accused memory components (where
`there were no U.S. sales of accused image sensor components), and (2) downstream products
`incorporating accused memory and image sensor components, these sales are distinguishable
`from the foreign sales issue above. Samsung’s accused memory components are sold in the U.S.
`(by defendant SSI) only to original-equipment-manufacture customers for inclusion in their
`third-party downstream products. Ex. 9 at 10; Ex. 10 at 13. Samsung’s own downstream
`products sold in the U.S. thus incorporate unique memory components. Samsung agreed to
`produce U.S. sales data for both memory components, and downstream products incorporating
`those components, as that did not risk double recovery of the same accused components.
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`In contrast, where Samsung produced all worldwide sales for accused memory and image
`sensor components containing SAS products, to external and internal customers (with transfer
`prices also provided), there is no valid use for further sales of downstream products including the
`same accused components containing SAS products. This request unjustifiable on its face.
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`Thus, Samsung respectfully requests that the Court deny Elm’s request for foreign sales
`of downstream products, for which worldwide sales for the underlying accused components has
`been produced, and deny all other requests for relief raised by Elm as moot.
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 5 of 7 PageID #: 18461
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`Respectfully submitted,
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`/s/ Adam W. Poff
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`Adam W. Poff (No. 3990)
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 6 of 7 PageID #: 18462
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`CERTIFICATE OF SERVICE
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`I, Adam W. Poff, hereby certify that on February 25, 2020, I caused to be
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`electronically filed a true and correct copy of the foregoing document with the Clerk of the Court
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`using CM/ECF, which will send notification that such filing is available for viewing and
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`downloading to the following counsel of record:
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`Joseph J. Farnan, Jr. Esquire
`Brian E. Farnan, Esquire
`Michael J. Farnan, Esquire
`Farnan, LLP
`919 North Market Street, 12th Floor
`Wilmington, DE 19801
`farnan@farnanlaw.com
`bfarnan@farnanlaw.com
`mfarnan@farnanlaw.com
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`Attorneys for Plaintiff
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`I further certify that on February 25, 2020, I caused a true and correct copy of the
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`foregoing document to be served by e-mail on the above-listed counsel of record, and on the
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`following:
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`Adam K. Mortara, Esquire
`Matthew R. Ford, Esquire
`Bartlit Beck LLP
`54 West Hubbard Street, Suite 300
`Chicago, IL 60654
`adam.mortara@bartlit-beck.com
`matthew.ford@bartlit-beck.com
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`16577858.1
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`Case 1:14-cv-01430-LPS Document 257 Filed 02/25/20 Page 7 of 7 PageID #: 18463
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`John M. Hughes, Esquire
`Katherine L.I. Hacker, Esquire
`Nosson D. Knobloch, Esquire
`Daniel C. Taylor, Esquire
`Bartlit Beck LLP
`1801 Wewatta, Suite 1200
`Denver, CO 80202
`john.hughes@bartlit-beck.com
`kat.hacker@bartlit-beck.com
`nosson.knobloch@bartlit-beck.com
`dan.taylor@bartlit-beck.com
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`Attorneys for Plaintiff
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` YOUNG CONAWAY STARGATT
` & TAYLOR, LLP
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`/s/ Adam W. Poff
`Adam W. Poff (No. 3990)
`Pilar G. Kraman (No. 5199)
`Rodney Square
`1000 North King Street
`Wilmington, Delaware 19801
`(302) 571-6600
`apoff@ycst.com
`pkraman@ycst.com
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`Attorneys for Defendants
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`16577858.1
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