Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11313 Filed 10/11/23 Page 1 of 18
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`Response to
`Defendants’ Motion to
`Compel
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`Redacted Version of
`Document to be Sealed
`Pursuant to LR
`5.3(b)(3)(B)(iii)
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`

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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11314 Filed 10/11/23 Page 2 of 18
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`
`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
`
`
`2:22-MD-03034-TGB
`
`HON. TERRENCE G. BERG
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`
`§
`§
`§
`§
`§
`§
`§
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`PLAINTIFF NEO WIRELESS, LLC’S RESPONSE TO DEFENDANTS’
`JOINT MOTION TO COMPEL PRODUCTION OF NEO’S LICENSING
`NEGOTIATIONS WITH AVANCI
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`

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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11315 Filed 10/11/23 Page 3 of 18
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`TABLE OF CONTENTS
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`I.
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`INTRODUCTION .............................................................................................................. 1
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`II. BACKGROUND REGARDING AVANCI ................................................................ 3
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`III. ARGUMENT ....................................................................................................................... 7
`A. Defendants’ Request for Neo’s Licensing Negotiations Opposite
`Avanci Is Moot. ................................................................................................ 7
`B. Neo’s Internal Settlement Deliberations Are Not Discoverable. ..................... 7
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`IV. CONCLUSION ................................................................................................................. 10
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`i
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11316 Filed 10/11/23 Page 4 of 18
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`TABLE OF AUTHORITIES
`
`
`Cases
`
`3G Licensing, S.A. et al. v. Blackberry Ltd. et al.
` No. 1:17-cv-00082, Dkt. 326 (D. Del. Sept. 29, 2020) .......................................... 5
`
`Broadcom Corp. v. Qualcomm Inc.
` 501 F.3d 297 (3d Cir. 2007) ................................................................................... 5
`
`Dura Global Techs., Inc. v. Magna Donnelly Corp.
` 2:07-cv-10945, 2008 WL 2217682 (E.D. Mich. May 27, 2008) .........................10
`
`JP Morgan Chase Bank, N.A. v. Winget
` No. 08-13845, 2010 WL 11545362 (E.D. Mich. Dec. 10, 2010) ........................10
`
`SPX Corp. v. Bartec USA, LLC
` 247 F.R.D. 516 (E.D. Mich. 2008) ......................................................................... 8
`
`Toledo Edison Co. v. G A Technologies, Inc.
` 847 F.2d 335 (6th Cir. 1988) .................................................................................. 9
`
`Xerox Corp. v. Google Inc.
` 801 F. Supp. 2d 293 (D. Del. 2011) ....................................................................... 9
`
`Rules
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`Fed. R. Civ. P. 26(b)(3)(A) ........................................................................................ 8
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`ii
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`MOST APPROPRIATE AND CONTROLLING AUTHORITIES
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`
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`Dura Global Techs., Inc. v. Magna Donnelly Corp., 2:07-cv-10945, 2008 WL
`2217682 (E.D. Mich. May 27, 2008)
`
`
`JP Morgan Chase Bank, N.A. v. Winget, No. 08-13845, 2010 WL 11545362 (E.D.
`Mich. Dec. 10, 2010)
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`
`
`iv
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11319 Filed 10/11/23 Page 7 of 18
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`I.
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`INTRODUCTION
`Neo has mooted this dispute and agreed to produce everything Defendants
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`have asked for, with the sole exception of
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`. But Defendants have been determined since the
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`outset of this process to bring some dispute—any dispute—before the Court no
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`matter what, and have insisted that a dispute still remains.
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`Neo has tried over several weeks to confer with Defendants about what
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`they truly want, and has capitulated on nearly everything they have asked for—
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`even as those requests have broadened and shifted—in an effort to compromise
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`and avoid burdening the Court. For example, when Defendants’ Motion revealed
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`that they misunderstood or were misrepresenting what little Neo was actually
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`withholding, Neo wrote them to again try to resolve the dispute. Neo first
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`explained that the only documents
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`, but that in any case
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`Neo has decided to produce
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` to avoid a dispute, mooting that
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`issue. Ex. A. And Neo further explained that, with respect to Section III.B of the
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`Motion, the
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`1
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`already produced any outstanding non-email documents and information on
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`September 27th (the day Defendants filed their Motion). But Neo’s written
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`commitment not to withhold the disputed information was insufficient, and
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`Defendants insisted Neo still needed to respond to the Motion.
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`With regard to the second part, even having learned more about the
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`specific, litigation-focused nature of
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`, Defendants still demand more information.
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`This is improper not only because Defendants are legally wrong about waiver
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`(and spent barely a paragraph of the Motion arguing otherwise), but because the
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`information is inadmissible at trial under FRE 408, even if it was discoverable.
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`Defendants have no substantial need for this information to further the merits of
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`their case; they simply want to get a peek behind the curtain at Neo’s private
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`settlement deliberations. If Defendants want to know more about Neo’s
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`settlement positions, Neo has long been willing to engage with them directly. But
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`Defendants cannot undermine the adversarial process by seeking Neo’s work
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`product in discovery to obtain unfair leverage at the negotiating table.
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`II. BACKGROUND REGARDING AVANCI
`As Defendants explained, Avanci is a 4G/LTE patent pool that aggregates
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`thousands of allegedly essential patents and offers automakers like Defendants a
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`license to the “pool” of patents for a uniform rate per vehicle. The current
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`3
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11322 Filed 10/11/23 Page 10 of 18
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`advertised rate is $20/vehicle.3 As Neo explained in an interrogatory response
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`served the day Defendants filed their Motion,
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` Ex. B. But although
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` the deal did not come to fruition.
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`It is easy to see why Defendants are so keen to obtain discovery about
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`Avanci in this case. Because unlike the hypothetical negotiation that will form
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`the basis for damages in this case, the Avanci model aggregates thousands of
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`standard essential patents (“SEPs”) together in an undifferentiated way, for a flat
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`fee. Pool-based models like this, while potentially attractive to technology
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`implementers like Defendants (because they are cost effective) or to holders of
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`extremely large patent portfolios (who can make up by volume what they might
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`lack in quality or value), are unlikely to capture the value of individual patents,
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`because they fail to take into account the wide range of value and importance
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`across the various patents in the pool. Using Avanci as a touchstone might enable
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`Defendants to disingenuously contend that each of Neo’s patents should simply
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`be valued as one of the thousands that make up that $20/vehicle rate, ignoring the
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`many characteristics of Neo’s patents that set them apart from the average SEP:
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`their unique technical merit and importance; their unique licensing history; the
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`3 https://www.avanci.com/vehicle/4gvehicle/
`4
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11323 Filed 10/11/23 Page 11 of 18
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`fact that several of them have been confirmed valid against one or even two IPR
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`challenges by sophisticated litigation opponents; and the fact that they are not
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`encumbered by a FRAND commitment.4
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`This framework explains why Defendants have been so insistent in
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`pursuing ever-broadening discovery into Neo’s own dealings with Avanci. But
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`while Neo has agreed to provide Defendants with discovery about its negotiations
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`4 This latter factor is a very important distinction. Avanci explains in its literature
`that its model is based on “fair, reasonable and non-discriminatory (FRAND)
`licensing terms.” See Ex. C at *3. This phrase comes from a contractual
`requirement placed on patent holders who participate in Standard Setting
`Organizations like 3GPP (the SSO that promulgates the 4G/LTE standard). When
`companies participate in these SSOs and seek to place their own patented
`technologies into the standard (thereby guaranteeing a large, captive pool of
`licensees), the SSO generally makes them commit to license those patents on
`FRAND terms. See generally Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297,
`304 (3d Cir. 2007) (describing the requirement of a FRAND commitment in the
`context of the ETSI). There is a tradeoff: if you want to advocate for your patent
`to become a mandatory part of a worldwide standard, you have to make a
`contractual commitment to accept depressed, regulated royalties for that patent.
`Avanci’s model presumably reflects that tradeoff (in addition to the other
`constraints on its rate discussed above). But for Neo, no such tradeoff was made.
`Neo developed its technology and patented its inventions independently of any
`SSO. And Neo did not advocate for its patents to be included in any standard, so
`Neo cannot be forced into a contractual commitment—that it never made—to
`accept depressed royalties. Therefore, Neo is not prohibited from seeking the full,
`uninhibited value of its inventions. This is a meaningful difference: damages
`opinions in some patent cases have estimated that a FRAND-encumbered license
`rate could be anywhere from five to seven times lower than a comparable rate
`without a FRAND commitment. See 3G Licensing, S.A. et al. v. Blackberry Ltd. et
`al., No. 1:17-cv-00082, Dkt. 326 at *19 (D. Del. Sept. 29, 2020) (denying motion
`to exclude expert testimony that assigned “5–7x multiplier” to non-FRAND
`damages versus FRAND rates.”).
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`5
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11324 Filed 10/11/23 Page 12 of 18
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`with Avanci to moot a needless dispute, Defendants’ comments about the
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`significance of this discovery as a damages indicator are heavily disputed. Those
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`negotiations took place at the outset of this litigation, when almost no litigation
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`costs had been incurred, in a manner that would have mooted most or all of this
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`litigation in its infancy. And Neo
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`. So even putting
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`aside the FRE 408 issues regarding the admissibility of any of this information,
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`Defendants have no basis to expect that they will be able to obtain the benefit of
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`this long-abandoned, FRAND-based, undifferentiated patent pool framework to
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`try to suppress Neo’s damages at trial.
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`Even less so the separate,
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` After
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`Marino Declaration. No
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`Defendants want to know
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`. See generally
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` have ensued, but
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` Those deliberations are even less reliable,
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`and more unequivocally inadmissible, than
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` And they are also plainly not discoverable.
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`6
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`. And here Avanci was
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` Marino Decl. ¶ 5–6. Avanci
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` Id. at ¶ 7.
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`The information Defendants seek here amounts to preliminary draft
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`settlement terms which Defendants admit were never communicated to them. In
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`other words, these are settlement terms that Neo considered at one point but has
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`not offered, as well as Neo’s thoughts and strategies underlying said terms,
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`developed with counsel, and shared with an agent under NDA and with a clear
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`expectation of secrecy. Id. at 8–10.
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`Defendants do not specifically address the nature of these materials in their
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`Motion, but there can be no real dispute that the requested information is
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`privileged (having been developed with counsel) and work product (having been
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`prepared specifically for litigation).6 The only dispute is whether Neo waived any
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`6 Defendants make passing reference to the idea that something cannot be work
`product if litigation is ongoing, since it cannot therefore be “in anticipation” of
`litigation. Mot. at 8. This is incorrect. See Fed. R. Civ. P. 26(b)(3)(A) (“Ordinarily,
`a party may not discover documents and tangible things that are prepared in
`anticipation of litigation or for trial….” (emphasis added)); SPX Corp. v. Bartec
`USA, LLC, 247 F.R.D. 516, 525 (E.D. Mich. 2008) (“To invoke the work-product
`doctrine, a party must show that the documents were prepared principally to assist
`in anticipated or ongoing litigation.” (emphasis added)).
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`8
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`Donnelly Corp., 2:07-cv-10945, 2008 WL 2217682, at *3 n.3 (E.D. Mich. May
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`27, 2008) (Although “there was no ‘common interest agreement’ entered into
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`between Toyota and Defendant,” the steps taken “were sufficient to prevent
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`waiver of the privilege.”).
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`Second, even if no common legal interest existed to prevent waiver of
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`attorney-client privilege, that would still not defeat the work product protection
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`over the disputed information. “[U]nlike the attorney-client privilege, the third
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`party to whom the disclosure is made must be an ‘adversary’ in order for waiver
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`to take place regarding work product material.” JP Morgan Chase Bank, N.A. v.
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`Winget, No. 08-13845, 2010 WL 11545362, at *8 (E.D. Mich. Dec. 10, 2010).7
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`There is no basis to allege that
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`. As a result, all of the
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`information sought remains non-discoverable work product.
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`IV. CONCLUSION
`The Court should deny the bulk of Defendants’ Motion as moot, and reject
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`Defendants’ attempt to pry into Neo’s privileged settlement deliberations.
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`7 Defendants cite two Northern District of California cases for the proposition that
`work product immunity is waived absent a common interest. Mot. at 9. But even if
`that is the rule in those courts, it does not apply here, where Sixth Circuit courts
`clearly require disclosure to an adversary to waive work product.
`10
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11329 Filed 10/11/23 Page 17 of 18
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`Respectfully submitted,
`/s/ Christopher S. Stewart
`Jason D. Cassady
`Texas State Bar No. 24045625
`Email: jcassady@caldwellcc.com
`Christopher S. Stewart
`Texas State Bar No. 24079399
`Email: cstewart@caldwellcc.com
`CALDWELL CASSADY CURRY
`P.C.
`2121 N. Pearl St., Suite 1200
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`Jaye Quadrozzi (P71646)
`YOUNG, GARCIA &
`QUADROZZI, PC
`2775 Stansbury Blvd., Suite 125
`Farmington Hills, MI 48334
`Telephone: (248) 353-8620
`Email: quadrozzi@youngpc.com
`
`ATTORNEYS FOR PLAINTIFF
`NEO WIRELESS, LLC
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`DATED: October 11, 2023
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`Case 2:22-md-03034-TGB ECF No. 188-1, PageID.11330 Filed 10/11/23 Page 18 of 18
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on October 11, 2023, the foregoing
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`document was filed electronically with the Clerk of Court using the CM/ECF
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`system, which will send notification of such filing to all attorneys of record.
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`/s/ Christopher S. Stewart
`Christopher S. Stewart
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