Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 1 of 6
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`April 7, 2021
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`Hon. Paul G. Gardephe
`United States District Court, Southern District of New York
`40 Foley Square, Room 2204, New York, New York 10007
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`Re: Network-1 Technologies, Inc. v. Google LLC, et al.,
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`Case Nos. 1:14-cv-2396-PGG & 1:14-cv-9558-PGG
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`Dear Judge Gardephe:
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`12424
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`Wilshire Boulevard
`12th Floor
`Los Angeles
`California
`90025
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`Tel 310.826.7474
`Fax 310.826.6991
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`Pursuant to L.C.R. 37.2 and Para. 4(E) of the Court’s Individual Rules, the parties submit this joint
`letter. The parties (Amy Hayden for Network-1 and Andrew Trask and Melissa Collins for Google)
`met and conferred via teleconference for approximately ten minutes on March 22, 2021.
`I.
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`Network-1’s Position: Defendants Cannot Unilaterally Re-Open Discovery
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`Fact discovery in these cases closed more than a year ago on November 1, 2019. Dkt. No. 201.
`The parties have completed both expert discovery (Dkt. No. 213) and summary judgment briefing
`(Dkt. No. 246). These two cases have been pending since 2014. Google has continually attempted
`to delay resolution, including with a long stay for PTAB proceedings and a related appeal,
`ultimately resulting in a remand vindicating the validity of the asserted patent claims. The parties
`exchanged over 800,000 pages of documents, conducted review of voluminous source code, as
`well as took 16 party depositions (both in the U.S. and Europe), 8 non-party depositions, and 8
`expert depositions. At this point, except for the Court deciding the pending motions for summary
`judgment and to the extent necessary claim construction disputes, this case is ready for trial.
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`Yet on February 19, 2021, out of the blue, Google served supplemental interrogatory responses
`(Ex. A) and informed Network-1 they “also are in the process of identifying relevant documents
`and will produce them when they are available,” and “are prepared to make a corporate
`representative for 30(b)(6) testimony on this topic at a time mutually convenient to the parties.”
`Ex. B. And Google, for the first time in this joint letter, seeks to expand this discovery even more,
`suggesting Network-1 could supplement expert reports if Google were also permitted to do so.
`Google’s belated discovery purports to articulate new alleged bases for its damages theories.
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`To serve additional discovery and bring additional evidence at this stage, Google must move this
`Court to re-open discovery, making the requisite good cause showing. U.S. v. Prevezon Holdings,
`Ltd., 236 F. Supp. 3d 871, 873 (S.D.N.Y. 2017) (construing request to introduce additional
`evidence as application to re-open discovery). Network-1 promptly informed Google it cannot
`unilaterally re-open discovery, and must seek leave. Ex. C. Google refused (see Ex. D), and then
`produced more than 1500 pages of documents on March 12, 2021. Ex. E.
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`Google cannot show good cause to re-open discovery, and has not even attempted to do so. Rather,
`it attempts to excuse its blatant discovery violation by insisting it is merely complying with its
`obligations pursuant to Rule 26(e). Ex. D. “Making a supplemental disclosure [more than] a year
`after the close of fact discovery is not ‘timely,’ by any definition.” Ritchie Risk-Linked Strats.
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`Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 2 of 6
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`Hon. Paul G. Gardephe
`April 7, 2021
`Page 2
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`Trdg. v. Coventry First LLC, 280 F.R.D. 147, 161 (S.D.N.Y. 2012). Google seeks to introduce
`“evidence” to support its damages theories, likely because Network-1’s experts (more than a year
`ago) pointed out those theories are fatally flawed.1 This is not a supplementation to remedy a
`failure to disclose evidence Google failed to locate during discovery. Instead, Google
`manufactured untimely evidence it hopes to use to bolster its own defenses. Invoking Rule 26(e)
`is both disingenuous and unsupported. See U.S. v. Celgene Corp., 2016 U.S. Dist. LEXIS 156826,
`at *26 (C.D. Cal. Aug. 23, 2016) (“The late disclosure of new opinions and the expansion of the
`case requiring Defendant to defend ever-changing theories of liability is prejudicial to Defendant.
`[Plaintiff] cannot simply keep adding theories when she realizes that some will not work.”).
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`“In determining whether good cause [to re-open discovery] exists, courts consider six factors: (1)
`the imminence of trial; (2) whether the request is opposed; (3) whether the non-moving party
`would be prejudiced; (4) whether the moving party was diligent in obtaining discovery within the
`guidelines established by the court; (5) the foreseeability of the need for additional discovery in
`light of the time allowed for discovery by the district court; and (6) the likelihood that the discovery
`will lead to relevant evidence.” Prevezon, 236 F. Supp. 3d at 873. Concerning the first three, “while
`trial is not imminent, all the requests are opposed and [Network-1] would be prejudiced if
`discovery was reopened, as it would increase litigation costs, and further delay resolution of this
`litigation.” Saray Dokum ve Madeni Aksam Sanayi Turizm A.S. v. MTS Logistics, Inc., 335 F.R.D.
`50, 52 (S.D.N.Y. 2020). This case is at an advanced stage, with summary judgment briefing already
`completed. Google seeks to use unilateral self-help to reinitiate discovery. This would impose
`significant prejudice on Network-1, including analysis of belated materials, and deposition of an
`unknown number of witnesses on topics Network-1 already conducted depositions on at great
`expense.
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`Concerning the fourth factor, Google was not diligent in obtaining the evidence it now seeks to
`introduce, which relates to alleged changes to its infringing system made in late 2020 and 2021.
`Ex. A at 3-5. Google posits these changes would allegedly “be relatively simply as a technical
`matter, would not take long, would be relatively inexpensive, and would have no adverse effect on
`the functioning of the [infringing system].” Id. at 4-5. If this were true, Google could (and should)
`have made these changes well before fact discovery closed (at any time in the more than six years
`this case has been pending), but instead elected to wait many years. On the fifth factor, Google
`previously introduced evidence concerning the same alleged non-infringing alternative,
`confirming it foresaw wanting to introduce evidence concerning this defense. It already purported
`to offer a witness designated to testify on this topic and required Network-1 to incur the cost of
`taking that deposition in the U.K. Finally, the proposed discovery is not likely lead to any relevant,
`admissible evidence, and if introduced at trial would confuse the issues and mislead the jury. The
`presence or absence of non-infringing alternatives is to be considered at the time of the
`hypothetical negotiation, in this case in 2011 when the ’988 patent issued. See Grain Processing
`Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341, 1353, 1355 (Fed. Cir. 1999). If Google asserts it
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`1 Google cites no support for its theory that the cost of implementing a non-infringing alternative serves as an “upper
`bound” on a reasonable royalty. Indeed, the Federal Circuit has rejected this notion. See, e.g., Mars, Inc. v. Coin
`Acceptors, Inc., 527 F.3d 1359, 1373 (Fed. Cir. 2008).
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`Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 3 of 6
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`Hon. Paul G. Gardephe
`April 7, 2021
`Page 3
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`could not have made these changes until recently, the information is irrelevant on its face. If
`Google argues it could have altered the old LSH version of ContentID as it existed in 2011, it has
`not offered any evidence the alleged changes made to its new Siberia system in 2020-2021 are
`somehow representative of or related to (unspecified) changes that could have been made a decade
`ago to the pre-Siberia system that undisputedly operated in a different manner and different
`technological environment.
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`Alternatively, Network-1 moves to strike Google’s supplemental responses and any subsequent
`document production. “If a party fails to provide information or identify a witness as required by
`Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on
`a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.”
`Rule 37(c)(1). “Rule 37(c)(1) is intended to prevent the practice of ‘sandbagging’ an opposing
`party with new evidence.” New World Solns., Inc. v. NameMedia Inc., 150 F. Supp. 3d 287, 304
`(S.D.N.Y. 2015). “To determine whether preclusion is warranted under Rule 37, a court must
`consider ‘(1) the party’s explanation for the failure to comply with the disclosure requirement; (2)
`the importance of the testimony of the precluded witnesses; (3) the prejudice suffered by the
`opposing party as a result of having to prepare to meet the new [evidence]; and (4) the possibility
`of a continuance.’” Id. (quoting Design Strategy, Inc. v. Davis, 469 F.3d 284, 296 (2d Cir. 2006)).
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`Google has offered no credible reason for failing to disclose this information earlier (and claims it
`need not seek leave to do so), the evidence is unlikely to be relevant or admissible, and Network-
`1 will suffer prejudice. In addition, a continuance is not appropriate here: “To reopen discovery
`now, a year after it has closed, would seem to be an unjustified drain on the resources of the parties
`and the Court and weighs in favor of preclusion.”523 IP LLC v. CureMD.com, 48 F. Supp. 3d 600,
`638-39 (S.D.N.Y. 2014) (rejecting defendant’s argument it was simply complying with Rule 26(e)
`and excluding evidence introduced a year after the close of discovery). However, if the Court
`allows Google to re-open fact discovery and declines to strike this evidence, Network-1 requests
`that the Court order Google to pay Network-1’s attorneys’ fees and costs incurred in filing this
`discovery letter and conducting this additional discovery. See Ritchie, 280 F.R.D. at 162.
`II.
`Google’s Position: Supplementation Pursuant to Rule 26(e) Is Proper.
`Network-1’s position flies in the face of Rule 26(e)(1), which requires a party to
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`supplement its discovery responses if newly available evidence renders its prior responses
`incomplete. To be clear: the documents and other recently produced evidence could not have
`been produced earlier because they did not exist earlier. Within a few weeks of the relevant events,
`Google supplemented discovery responses as required by Rule 26(e)(1), and even offered a
`30(b)(6) witness. Network-1 tries to characterize Google as having “re-opened” discovery. But
`Google’s compliance with Rule 26(e)(1) provides no basis for the remedy Network-1 seeks—
`namely, excluding evidence unfavorable to Network-1. Google’s timely supplement demonstrates
`that Google successfully relocated the Match System portion of the accused product, Content ID,
`outside of the United States. That evidence serves both to cut off Network-1’s theory of ongoing
`infringement and to undermine Network-1’s damages claim. Not only was Google’s
`supplementation prompt and appropriate, it also did not unfairly prejudice Network-1. The new
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`Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 4 of 6
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`Hon. Paul G. Gardephe
`April 7, 2021
`Page 4
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`evidence does not affect the pending summary judgment motions, and no trial date has been set.
`A central issue in this case is the alleged patent infringement by Defendants’ Content ID
`system. Because each of Network-1’s asserted claims is a method claim, Content ID infringes
`only if it performs every step of the methods within the United States. NTP, Inc. v. Rsch. In
`Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir. 2005). Google does not infringe the asserted patents
`for a number of reasons. But even so, Google has long disclosed that locating all or part of the
`accused system outside of the United States is a viable non-infringing alternative. In 2015 and
`2019, Google witnesses testified that it would be technically feasible and impose little cost or
`resource burden to operate the entire Match System on non-U.S. servers. Exs. F & G. Despite
`this evidence, Network-1’s experts took the position that such a move was not a “viable”
`alternative, opining that it likely would affect system performance and impose significant resource
`costs. Ex. H ¶¶ 32–33. Based on the notion that Google could not design around its patents,
`Network-1 seeks over $240 million in damages. Id. ¶ 90. In contrast, Google’s damages expert
`estimated that relocating the Match System would cost just over $1 million dollars, which would
`inform the upper bound on Google’s willingness to pay for a license in a hypothetical negotiation
`if Google were found to infringe. Ex. I ¶ 88.
`Recent events confirm that Network-1’s understanding was wrong and that moving the
`Match System abroad was as straightforward and relatively inexpensive as Google’s witnesses had
`testified. In the latter half of 2020, Google initiated the relocation of the Match System to servers
`entirely outside the United States. The moving process began in earnest in November 2020 and
`was completed in late January 2021. Ex. A. Google tracked costs and employee time for the
`project, resulting in figures fully consistent with the prior estimates by Google’s witnesses. Id.
`Network-1 had propounded interrogatories requesting that Google identify its bases for non-
`infringement (No. 7) and its non-infringing alternatives, including the costs and effects of
`implementation (No. 13). Id. It also had served requests for production of documents relating to
`Google’s non-infringement positions (Nos. 4 & 56) and any planned or implemented design-
`around (Nos. 13 & 63). See Exs. J & K. Accordingly, Google promptly supplemented its
`responses on February 19, Ex. A, and followed up with a supplemental 432-document production
`on March 12, Ex. E. Google also apprised Network-1 that it is willing to make a corporate
`representative available for 30(b)(6) testimony on this topic.
`This supplementation was consistent with Google’s obligations under Rule 26(e)(1) to
`“supplement or correct its disclosure or response . . . in a timely manner if the party learns that in
`some material respect the disclosure or response is incomplete or incorrect.” Fed. R. Civ. P.
`26(e)(1). “Disclosures under Rule 26(e) are continuing—they do not end when fact discovery
`closes.” Merryman v. Citigroup, Inc., 2018 WL 1621495, at *19 (S.D.N.Y. Mar. 22, 2018); see
`also Schindler Elevator Corp. v. Otis Elevator Co., 2010 WL 4007303, at *4–5 (S.D.N.Y. Oct. 6,
`2010) (denying motion to strike supplemental interrogatory response after close of discovery).
`The duty to supplement applies to documents and information that did not exist prior to the close
`of fact discovery, as is the case with the evidence provided here. Robbins & Myers, Inc. v. J.M.
`Huber Corp., 274 F.R.D. 63, 74–77 (W.D.N.Y. 2011).
`There is no question that Google supplemented “in a timely manner.” Network-1’s only
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`Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 5 of 6
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`Hon. Paul G. Gardephe
`April 7, 2021
`Page 5
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`argument that Google unduly delayed is based on the unfounded notion that Google was somehow
`required to change its system years ago simply because it had identified the possibility of doing
`so. See Ltr. at 2. But there is no legal requirement that a party who discloses a viable non-
`infringing alternative must immediately implement that alternative.
`Supplementing in response to already-served requests does not “re-open fact discovery,”
`as Network-1 claims, nor is it a basis to exclude evidence that did not exist during the discovery
`period. On the contrary, if a party fails to comply with Rule 26(e)—i.e., if Google did not
`supplement as it has done—then a Court may elect, but is not required, to preclude previously-
`undisclosed evidence submitted in support of a motion or at trial. Fed. R. Civ. P. 37(c). Network-
`1 would turn this rule on its head, and have the Court impose a preclusion sanction on the basis of
`the very supplementation the rules require.
`None of Network-1’s cited authority supports the remedy it seeks: precluding a party from
`supplementing discovery responses with relevant evidence that did not exist during the fact
`discovery period. Instead, its cases involve evidence that was or could have been obtained earlier,
`and many involve a party failing to supplement its responses—not the situation here, where the
`evidence did not exist during the fact discovery period, yet Network-1 opposes supplementation.
`See, e.g., Saray Dokum ve Madeni Aksam Sanayi Turizm A.S. v. MTS Logistics Inc., 335 F.R.D.
`50, 53 (S.D.N.Y. 2020) (denying request to reopen discovery because plaintiff had not pursued
`available evidence during the discovery period); United States v. Prevezon Holdings, Ltd., 236 F.
`Supp. 3d 871, 873–75 (S.D.N.Y. 2017) (limiting the reopening of discovery when plaintiff gave
`no reason why the evidence was not obtained earlier, and produced 43,000 pages less than four
`months before trial); New World Sols., Inc. v. NameMedia Inc., 150 F. Supp. 3d 287, 305, 309
`(S.D.N.Y. 2015) (precluding evidence by a party witness who failed to appear for or reschedule
`his deposition); 523 IP LLC v. CureMD.Com, 48 F. Supp. 3d 600, 638 (S.D.N.Y. 2014) (excluding
`evidence that existed during discovery regarding a system defendants had not disclosed they would
`rely on as invalidating prior art); Ritchie Risk-Linked Strategies Trading (Ireland), Ltd. v. Coventry
`First LLC, 280 F.R.D. 147, 159, 162 (S.D.N.Y. 2012) (allowing evidence even when party failed
`to disclose a theory of damages that had been available since the beginning of the suit); United
`States v. Celgene Corp., 2016 WL 6562065, at *4 (C.D. Cal. Aug. 23, 2016) (expert not permitted
`to supplement “based on evidence that was available at the time the initial expert report was due”).
`Even if the Court were to construe Google’s supplementation as “re-open[ing] fact
`discovery,” that discovery is warranted. Network-1 cannot credibly contend this evidence is
`irrelevant to its claim of continued infringement, and any argument that it is not probative of
`damages can be weighed by a factfinder. The record shows that Google promptly disclosed new
`evidence supporting its existing theories when that evidence became available, and there is no
`undue prejudice to Network-1. The court has not set a trial date, and the new evidence has no
`impact on the pending summary judgment motions. Network-1 can easily review the documents
`Google produced, and to the extent Network-1 has further questions, Google has offered a 30(b)(6)
`deposition on the topic, which can be held remotely. Moreover, if Network-1 desires to timely
`supplement its expert reports on this discrete topic, then Google would not oppose, provided that
`Google were permitted rebuttal supplementation of its experts’ reports. Finally, because Google
`is complying with its disclosure obligations, there is no basis to award discovery fees and costs.
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`Case 1:14-cv-02396-PGG-SN Document 249 Filed 04/07/21 Page 6 of 6
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`Hon. Paul G. Gardephe
`April 7, 2021
`Page 6
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`Dated: April 7, 2021
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`Respectfully submitted,
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`RUSS, AUGUST & KABAT
`BY: s/ Amy E. Hayden
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`Marc A. Fenster (pro hac vice)
`Brian D. Ledahl (pro hac vice)
`Adam S. Hoffman (pro hac vice)
`Paul A. Kroeger (pro hac vice)
`Jacob R. Buczko (pro hac vice)
`Amy E. Hayden (pro hac vice)
`12424 Wilshire Blvd. 12th Floor
`Los Angeles, CA 90025
`Phone: (310) 826-7474
`Fax: (310) 826-6991
`mfenster@raklaw.com
`bledahl@raklaw.com
`ahoffman@raklaw.com
`pkroeger@raklaw.com
`jbuczko@raklaw.com
`ahayden@raklaw.com
`
`Charles R. Macedo
`AMSTER, ROTHSTEIN &
`EBENSTEIN LLP
`90 Park Avenue
`New York, NY 10016
`Phone: (212) 336-8074
`Fax: (212) 336-8001
`cmacedo@arelaw.com
`
`
`Attorneys for Network-1
`Technologies, Inc.
`
`WILLIAMS & CONNOLLY LLP
`BY: s/ Andrew V. Trask
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`Thomas H. L. Selby (pro hac vice)
`Samuel Bryant Davidoff
`Andrew V. Trask
`Melissa Collins (pro hac vice)
`Graham W. Safty (pro hac vice)
`Sumeet P. Dang (pro hac vice)
`725 Twelfth Street, NW
`Washington, DC 20005
`Phone: (202) 434-5000
`Fax: (202) 434-5029
`tselby@wc.com
`sdavidoff@wc.com
`atrask@wc.com
`mcollins@wc.com
`gsafty@wc.com
`sdang@wc.com
`
`For Matters in New York:
`WILLIAMS & CONNOLLY LLP
`650 Fifth Avenue, Suite 1500
`New York, NY 10022
`
`Kevin Hardy (pro hac vice)
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`1300 I Street, NW, Suite 900
`Washington, DC 20005
`Phone: (202) 538-8000
`Fax: (202) 538-8100
`kevinhardy@quinnemanuel.com
`
`Attorneys for Google LLC and
`YouTube, LLC
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`
`