`
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________
`
`COLEMAN CABLE, LLC, JIAWEI TECHNOLOGY (HK) LTD., JIAWEI
`TECHNOLOGY (USA) LTD., SHENZHEN JIAWEI PHOTOVOLTAIC
`LIGHTING CO, LTD., ATICO INTERNATIONAL (ASIA) LTD., ATICO
`INTERNATIONAL USA, INC., SMART SOLAR, INC, AND TEST RITE
`PRODUCTS CORP.
`Petitioner,
`
`v.
`
`SIMON NICHOLAS RICHMOND
`Patent Owner.
`______________
`
`Case IPR2014-00935
`Patent 8,089,370
`
`Declaration of Guyton Cochran
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`1
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`Jiawei et al. Exhibit 1055 Page 1
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`
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`1.
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`My name is Guyton Cochran.
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`I am over 21 years old and unless
`
`stated otherwise have personal knowledge of the matters set forth herein.
`
`2.
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`I am the Treasurer of Coleman Cable, LLC ("Coleman"). In my role
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`as Treasurer, I oversee Coleman's books, finances, and all of its financial matters.
`
`I am familiar with Coleman’s finances and budgets, including the budget for the
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`defense of the Richmond district court litigation and the inter partes review
`
`proceedings (“IPRs”) that I understand are the subject of a termination motion by
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`Mr. Richmond. I am also generally familiar with Southwire Company's acquisition
`
`of Coleman and with events that have occurred thereafter. I became the Treasurer
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`of Coleman in February 2014.
`
`3.
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`I am also the Executive Vice President and Chief Financial Officer of
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`Southwire. In that role, I oversee Southwire's financial matters.
`
`I have held that
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`position since 2003.
`
`4.
`
`I have read the Patent Owner's Motions to Terminate ("Motions") and
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`have been asked by counsel to provide testimony in response and to address the
`
`exhibits cited in the Motions.
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`It is my understanding the same exhibits have
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`different exhibit numbers in each of the Motions. This declaration attempts to
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`address the exhibits corresponding to the exhibit numbers in the corresponding
`
`motion. My counsel prepared a table correlating the exhibit numbers across all of
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`the Motions such that if a mistake has been made it will still be possible to
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`2
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`Jiawei et al. Exhibit 1055 Page 2
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`
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`correlate the exhibit
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`I am referring to with the exhibit number
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`from the
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`corresponding motion. The table is attached with this filing in the list of exhibits.
`
`Unless stated otherwise, all exhibits attached to this declaration are true and correct
`
`copies.
`
`I.
`
`THE ACQUISITION OF COLEMAN BY SOUTHWIRE
`
`5.
`
`In December 2013, Southwire Company, Coleman Cable, Inc. and
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`Cubs Acquisition Corp. ("Cubs") signed an Agreement and Plan of Merger. Cubs
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`was a wholly owned subsidiary of Southwire Company formed in anticipation of
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`Southwire Company's purchase of 100% of the outstanding stock of Coleman
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`Cable, Inc. On February 11, 2014, the merger certificate was filed with the
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`Secretary of State for the State of Delaware, and the transaction closed. At that
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`time, Cubs merged with and into Coleman Cable, Inc., with Coleman Cable, Inc.
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`being the surviving corporation.
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`6.
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`The directors of Coleman Cable, Inc. were Stuart Thorn, John
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`Carlson, and me. The officers of Coleman Cable, Inc. were appointed by the
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`directors. The officers were Stuart Thorn (President), Floyd Smith (Secretary), and
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`me (Treasurer). All of Coleman Cable, Inc.'s assets, liabilities, and corporate
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`actions survived the merger and continued as assets, liabilities, and corporate
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`actions of Colman Cable, Inc.
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`3
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`Jiawei et al. Exhibit 1055 Page 3
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`7.
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`A corporate reorganization occurred post-merger.
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`During the
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`reorganization, Coleman Cable, Inc. was converted into Coleman Cable, LLC (a
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`Delaware limited liability company)―the "Coleman" referred to throughout this
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`declaration. Southwire Company was also converted into Southwire Company,
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`LLC. Upon reorganization, Coleman Cable, LLC was once again a wholly owned
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`subsidiary of Southwire Company, LLC ("Southwire"). The structure of the
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`merger and subsequent reorganization was designed to keep Coleman's assets and
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`liabilities separated from Southwire for tax and other purposes.
`
`8.
`
`Exhibit 1026 is the Limited Liability Company Agreement of
`
`Coleman Cable, LLC. Paragraph 7 of the Agreement indicates that the Member
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`(Southwire) shall "manage" the Company (Coleman Cable, LLC). On March 5,
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`2014, the Southwire Board put forth Resolution No. 3 (attached as Exhibit 1027).
`
`That resolution provided in part
`
`that "officers in each corporate entity [e.g.,
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`Southwire and Coleman] … shall be, and upon ratification by the managing
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`member of each company …, is, authorized to act on behalf of such ratifying
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`company … as if they were officers in each such company, …". The officers of
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`Coleman at that time were also officers in Southwire.
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`9.
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`The Resolution was adopted by Southwire, but not by Coleman.
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`Coleman's officers' (Messrs. Thorn, Smith and me), when acting on behalf of
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`Coleman, do not have the authority to act on behalf of Southwire. Likewise, when
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`4
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`Jiawei et al. Exhibit 1055 Page 4
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`acting on behalf of Southwire, we do not have the authority to act on behalf of
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`Coleman. Stated differently, when I am acting for Coleman as Treasurer I am not
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`acting for, or authorized to act for, Southwire; and when I am acting on behalf of
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`Southwire I am not acting for, or authorized to act for, Coleman.
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`I respect this
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`distinction when performing my duties for both Coleman and Southwire.
`
`10.
`
`I have worked with Messrs. Smith and Thorn in their capacity as
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`officers of Coleman and Southwire, and can state that they respected the distinction
`
`between Coleman and Southwire when performing their respective duties for each
`
`company.
`
`11.
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`The Resolution further resolved that authorized officers may use
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`business cards and marketing materials with the designation "The Southwire
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`Group," but that all contracts or agreements shall be made in the name of the
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`individual company within the Southwire Group. As the resolution was not
`
`adopted, no such business cards or marketing materials were issued.
`
`II.
`
`CONTROL AND FUNDING OF THE IPRS
`
`12.
`
`I worked with Mr. Smith as an officer of Coleman,
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`including
`
`consulting on budgetary matters, which included an accrual relating to the
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`Richmond litigation defense and IPRs that is discussed in more detail later in this
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`declaration. I am generally familiar with Mr. Smith's role in the IPRs and with his
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`5
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`Jiawei et al. Exhibit 1055 Page 5
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`
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`individual responsibilities at Coleman and at Southwire. Mr. Smith retired on
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`January 30, 2015.
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`13.
`
`I understand that one of Mr. Smith’s responsibilities as Secretary of
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`Coleman was to handle high-level legal matters, including signing powers of
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`attorneys.
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`In the course of preparing this declaration, I reviewed the Powers of
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`Attorney signed in these IPRs. Based on my understanding of Mr. Smith’s
`
`responsibilities, and my work with him in connection with the accrual for the
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`Richmond defense, I understand that Mr. Smith's signature as "Secretary" on the
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`Power of Attorney meant that he signed this document in his capacity as the
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`Secretary of Coleman acting on behalf of Coleman. For the reasons stated above,
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`Mr. Smith did not have the authority to sign a Coleman-related document in his
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`capacity as an officer of Southwire. Neither Mr. Smith nor Coleman was acting as
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`Southwire's proxy, or on behalf of Southwire, when authorizing the IPRs on behalf
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`of Coleman. Additionally, it is my understanding that Mr. Smith typically signed
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`Power of Attorney document on behalf of Southwire using his Southwire title.
`
`Exhibit 1028 is an example of one such document.
`
`14.
`
`I have no information that leads me to understand that Southwire
`
`directed the IPRs or otherwise had the ability to control them. As stated above,
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`Southwire's officers could not act on behalf of Coleman in such matters. In sum,
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`Coleman controlled and directed the IPRs.
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`6
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`Jiawei et al. Exhibit 1055 Page 6
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`15.
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`I am informed that the law firm of Patzik, Frank & Samotny Ltd.
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`(“PFS”) has represented Coleman Cable, Inc. and its predecessors since about
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`1993. At some point during that representation before the acquisition, Coleman
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`Cable, Inc. established an accrual to pay for PFS’s legal services, which included
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`defense against Richmond’s patent suits, including the then-possible IPRs. A
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`Coleman Cable, Inc. employee established the accrual. After the acquisition,
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`Coleman maintained the accrual under my leadership.
`
`16.
`
`In the second quarter of 2014, Coleman agreed to contribute
`
`toward the IPRs.
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`It is my understanding that this amount was to be
`
`invoiced over several months and that IPR counsel at Dentons sent the invoices to
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`Coleman through Coleman's outside litigation counsel, Jonathan Goodman of PFS,
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`who then forwarded them to Coleman for payment. Coleman paid the invoices
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`from its bank accounts, which were separate from Southwire's bank accounts.
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`Exhibit 1029 is a list of bank accounts owned by Coleman. To protect privacy all
`
`but
`
`the last four digits of the accounts are redacted.
`
`I understand that the
`
`respective
`
`Dentons
`
`invoices
`
`were
`
`paid
`
`from account
`
`numbers:
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`██████████4315, ██████1904, and ██████1581. I have reviewed the
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`Declaration of Kevin Greenleaf, which contains evidence that Dentons received
`
`payment from Coleman’s separate bank accounts. The table below was provided to
`
`me and shows the accounts used by Coleman to pay Dentons. For the first two
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`7
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`Jiawei et al. Exhibit 1055 Page 7
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`
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`payments, the table includes evidence from the Greenleaf declaration that indicates
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`the date Dentons received payment and the account information on the wire
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`transfer or check. For the second two payments, in addition to evidence from the
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`Greenleaf declaration, my research identified the accounts used by Coleman to pay
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`Dentons. Exhibit 1030 includes screen shots from our SAP accounting system
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`showing the Coleman accounts used to pay Dentons.
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`Payment Info, including acct. no.
`
`Date
`Paid
`
`8/27/14
`
`8
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`Jiawei et al. Exhibit 1055 Page 8
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`
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`11/14/14
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`11/20/14
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`9
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`Jiawei et al. Exhibit 1055 Page 9
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`
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`Coleman proof of sending from ***1581:
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`Dentons proof of receipt:
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`4/21/15
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`Unpaid
`
`10
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`Jiawei et al. Exhibit 1055 Page 10
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`
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`A portion of Ex. 1029 is reproduced below with the account numbers from which
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`funds were withdrawn to pay the Dentons invoices also highlighted in yellow.
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`17.
`
`The evidence above confirms my understanding that the payments to
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`Dentons were drawn from Coleman’s accounts for the IPRs, as Dentons does not
`
`represent Coleman in the corresponding ligation.
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`18.
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`The payment of November 14, 2014 was made out to PFS.
`
`I am
`
`informed that this was a mistake, and that PFS endorsed the payment over to
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`Dentons. That payment includes Southwire's name and address on the check stub,
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`along with the Coleman Trademark (CCI™) on the check. A reproduction of that
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`check is contained in the table above (the second row). The check for they
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`payment on November 20, 2014, was printed similarly. It is my understanding that
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`copies of these checks and check stubs are being provided in a declaration by
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`counsel.
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`11
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`Jiawei et al. Exhibit 1055 Page 11
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`19.
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`The bank account printed on both checks, account █████1904, is
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`Coleman Cable LLC’s controlled disbursement account. The reason Southwire's
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`name appears on the paystubs is that in October 2014, Coleman switched its
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`financial software from an AS400 platform to an SAP platform. At that time,
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`Coleman accounts payable processing moved to Carrollton, Georgia and a PO box
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`was utilized for Coleman and Southwire mail. The mail was then separated for
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`each company and dealt with separately by each company.
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`It is this PO box that
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`appears at the top of the check stub and under the CCI trademark.
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`20.
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`The funds used to pay Dentons' invoices related to these checks, as
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`well as all Dentons' invoices, were sourced from Coleman’s earnings and remitted
`
`through Coleman’s bank accounts. Each of these accounts was funded by the
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`earnings of Coleman.
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`21.
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`In sum, Coleman solely funded the IPRs.
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`Southwire made no
`
`contributions to these accounts and does not control them. While Southwire
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`remains the parent and member of Coleman, it did not supervise or control the IPR
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`budgeting decisions.
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`Those decisions were my responsibility as Coleman's
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`Treasurer. There remains an outstanding invoice of approximately
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`,
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`which will also be paid by Coleman.
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`12
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`Jiawei et al. Exhibit 1055 Page 12
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`
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`III. POST ACQUISITION
`
`A.
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`22.
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`February 2014 - July, 6, 2015
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`Coleman and Southwire continued to operate as separate companies
`
`after the acquisition. This separation was maintained for legal and practical
`
`reasons.
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`23. Among the legal reasons the companies remained separate were to
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`preserve tax advantages achieved by the transaction's structure (the companies will
`
`file separate 2014 tax returns) and Coleman's decision not to adopt the previously-
`
`described Resolution. In addition, Coleman also had contracts containing "change
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`of control" or assignment provisions. Exhibit 1031 is an example of one such
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`contract. To protect privacy, much of the contract has been redacted. The two
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`companies' intellectual property also remained separate. The Moonrays trademark,
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`for example, is owned by WIIP, Inc. (formally Woods Industries (Canada), Inc.),
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`an entity that holds intellectual property relating to Coleman, but not Southwire.
`
`Exhibit 1032.
`
`24.
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`Among the practical reasons the companies continued to operate
`
`independently was that it was not practically feasible to combine two previously
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`unrelated companies into one in a timely and efficient manner. By way of
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`example, Coleman had separate bank accounts, invoicing, billing and shipping
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`systems. Coleman and Southwire had different sales forces, and neither company
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`13
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`Jiawei et al. Exhibit 1055 Page 13
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`had ready access to the SKUs of the other's products. The employees of Coleman
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`were on separate health, welfare, and retirement plans.
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`(Exhibits 1033-1036).
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`Coleman's collective bargaining agreements remain with Coleman. Coleman has
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`separate plants and facilities from Southwire, and enters into its own contracts with
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`suppliers, vendors, and customers. Coleman and Southwire had separate websites.
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`Exhibits 1037 and 1038 are print outs of the first page of each company's
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`respective website.
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`25.
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`The two companies' planned independence was manifested externally
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`pre-acquisition. For example, prior to the acquisition, Coleman sent a letter to its
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`customers ensuring them, among other things, that the "transaction" will have "no
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`impact on the day-to-day operations of our business[,] [y]our Coleman contacts
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`will remain the same, all current contracts will be honored, and there will be no
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`immediate changes in how we conduct business with you." Ex. 1039.
`
`26.
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`This situation remained the same post-acquisition. For example, the
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`February 17, 2014 letter (Richmond Ex. 2058) explains that the status quo would
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`not change after the acquisition: “For Coleman customers: Your Coleman contacts
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`will remain the same, you will continue to submit purchase orders to Coleman
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`Cable and your product shipments will continue to flow from Coleman Cable
`
`facilities.” The letter further states that the two companies are working to "craft"
`
`the integration strategy: "[n]ow, the real work begins with integrating these two
`
`14
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`Jiawei et al. Exhibit 1055 Page 14
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`
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`organizations…." The letter was signed separately by executives from both
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`companies.
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`27.
`
`The August 14, 2014 letter (cited by Richmond as Ex. 2063), although
`
`appearing on a Southwire letterhead, also discusses the two companies separately.
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`For example, the letter refers to "valued Southwire and Coleman Cable customers,"
`
`repeatedly references "Southwire and Coleman Cable" instead of using a generic,
`
`umbrella term to encompass both companies, and distinguishes between Southwire
`
`and Coleman sales representatives.
`
`Recent Events─July 6, 2015
`B.
`28. Coleman and Southwire began executing plans to implement a
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`broader, outward-facing integration in March 2015 with the announcement of the
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`Fast Forward Program, Phase II (“FF Program”). Ex. 1040. Phase I of the
`
`program involved harmonizing certain Coleman back-office financial software to
`
`be compatible with Southwire's financial software.
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`29. A main goal of Phase II was to integrate the two companies such that
`
`Southwire would replace Coleman as the outward-facing supplier of Coleman’s
`
`products. This program was to be accomplished July 6, 2015. As discussed
`
`previously, the two companies remained separate (internally and outwardly-facing)
`
`until July 6, 2015, due to the previously-discussed legal and practical reasons.
`
`15
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`Jiawei et al. Exhibit 1055 Page 15
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`30.
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`To accomplish the July 6th goal, Southwire and Coleman needed to
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`remove legal impediments to integration, so Southwire and Coleman sent written
`
`notification to Coleman’s customers that they “will take yet another step to further
`
`integrate Coleman’s operations into Southwire’s own operations. As of and
`
`following July 6th, all
`
`invoices … will come from Southwire and will be
`
`Southwire-branded invoices. After this Date, you will no longer receive Coleman
`
`Cable-branded invoices.” Ex. 1041.
`
`31.
`
`The integration of the customer-facing invoicing occurred on July 6,
`
`2015. To the outside world, and in particular to customers, Coleman and
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`Southwire will likely appear to be behaving more like a single company after
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`July 6, 2015. For example, all invoicing will be from Southwire and be Southwire-
`
`branded.
`
`32.
`
`The two companies remain separate even after July 6, 2015, however.
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`Coleman and Southwire will still have separate bank accounts. Coleman's and
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`Southwire's employees still have separate health, welfare, and retirement plans.
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`Coleman's collective bargaining agreements remain with Coleman. The companies
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`still have separate payrolls, plants and facilities, as well as separate websites and
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`separate ownership of intellectual property.
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`16
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`Jiawei et al. Exhibit 1055 Page 16
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`
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`IV. THE EXHIBITS CITED IN RICHMOND'S MOTION
`
`33.
`
`I reviewed the exhibits attached to Richmond's motion. In performing
`
`that review, I understand that counsel grouped the documents into two groups
`
`based on date: (i) those documents dated before, or close to June 11, 2014, which
`
`is the date I understand the IPRs were filed, and (ii) other documents, either
`
`undated or dated well after June 11, 2014.
`
`34.
`
`Documents that fall into the first category are:
`
` Ex. 2056 (SEC submission)
` Ex. 2057 (Press Release dated 2/11/2014)
` Ex. 2058 (Press Release dated 2/17/2014)
` Ex. 2059 (Florida filing)
` Ex. 2060 (Webpage)
` Ex. 2061 (Advertisement)
` Ex. 2063 (price increase)
`
`35.
`
`Exhibit 2058 and 2063 have already been discussed. Exhibit 2061 is
`
`an advertisement that identifies the companies separately. Ex. 2059 is Coleman's
`
`“application by foreign limited liability company for authorization to transact
`
`business in Florida.” I signed that document in my capacity as a Treasurer of
`
`Coleman. The document also references Southwire Company, LLC as the
`
`parent/member of Coleman and lists heather.foster@southwire.com as the point of
`
`contact. Ms. Foster was listed as a contact because Coleman did not have an
`
`employee to receive information regarding tax issues. She would then refer
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`Coleman-related information to me in my capacity as Coleman's Treasurer.
`
`17
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`Jiawei et al. Exhibit 1055 Page 17
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`
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`36.
`
`Most of the other documents fall into the second group, including a
`
`large number of LinkedIn™ webpage screenshots:
`
` Ex. 2054 (Floyd W. Smith’s LinkedIn profile)
` Exs. 2055 and 2060 (Southwire Canada pages)
` Exs. 2064-65 (Kathy Jo Van)
` Ex. 2062 (Lisa Brigg [sic])
` Ex. 2066 (OtherLinkedIn)
` Ex. 2076 (Heather Foster)
`
`37.
`
`I have investigated the correctness of the information identified in
`
`these exhibits. Certain profiles appear incorrect. Exhibit 2062 identifies Ms.
`
`Biggs as being "import coordinator" for "Coleman Cable/Southwire" as of June
`
`2014. Ms. Biggs did not work for, and never drew a salary from, Southwire. Ex.
`
`1042 is a true and correct copy of Ms. Biggs earnings from Coleman. Ms. Biggs
`
`was a Coleman employee and remained so until February 2, 2015, the date she
`
`resigned. Ex. 1043.
`
`38. Ms. Van is a Coleman employee. She also has a title at Southwire.
`
`Based on my experience and knowledge, I understand that she, like me, maintains
`
`the separateness between her duties for Coleman and her duties for Southwire, as
`
`do others that wear "hats" at both companies. As for the other employees
`
`identified in the LinkedIn exhibits, all of them were and remain Coleman
`
`employees. Ex. 1044. Neither Coleman nor Southwire control their employees'
`
`personal social media accounts, including LinkedIn.
`
`39.
`
`Other, later-dated documents include:
`
`18
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`Jiawei et al. Exhibit 1055 Page 18
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`
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` Ex. 2052 (National Hardware Show Exhibitor Directory)
` Ex. 2053 (Twitter feed)
` Ex. 2067 (PR Web)
` Ex. 2068 (Brooks Electrical)
` Ex. 2069 (Security Equipment Supply)
` Ex. 2071 (Amazon.com sales)
`
`40.
`
`The special pricing announcement (Ex. 2068) and the Security
`
`Equipment Supply announcement (Ex. 2069) were not generated by Southwire or
`
`Coleman. The National Hardware Show Exhibit Directory (Ex. 2052) is also third-
`
`party generated, as is the PRWeb announcement (Ex. 2067). Although the Twitter
`
`feed appears to have been originated by Southwire, according to my investigation,
`
`no Southwire signage appeared at the booth at the National Hardware Show. Ex.
`
`1045 contains photographs taken of that booth.
`
`41.
`
`The sales purported to be Southwire sales are actually Coleman sales
`
`of Coleman's products to Amazon for resale. Exs. 2071 and 2072 (Exs. 1048 and
`
`1049 show the same information, only clearer). Exhibits 1045 and 1046 are
`
`Coleman invoices to Amazon for the Jeweled Rooster Stake (Coleman part no.
`
`91450, Amazon part no. B00P6O0L4K) and the Crane Stake Back Facing
`
`(Coleman part no. 92522, Amazon part no. 00OC3NM3S), respectively. To my
`
`knowledge, the only sales of Moonrays products by a Southwire entity were sales
`
`by Southwire Canada to its Canadian retailer customers.
`
`Southwire Canada
`
`ordered those products from Coleman, and Coleman invoiced Southwire Canada
`
`for those products.
`
`19
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`Jiawei et al. Exhibit 1055 Page 19
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`
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`42. Additional undated or later-dated documents include:
`
` Ex. 2074 (website customs print out)
` Ex. 2075 (similar)
`
`43.
`
`Ex. 2074 apparently comes from a website known as “panjiva.com”
`
`based on the information in the upper right-hand corner of the exhibit. I cannot be
`
`sure as to the authenticity of these documents. I can state that there is no company
`
`called "Coleman Cable Southwire
`
`Intl" or
`
`"Coleman Cable Southwire
`
`International." Without more information, I cannot ascertain the source of this
`
`information. The Waukegan, Illinois address identified as the destination of the
`
`products is Coleman's principal place of business.
`
`In addition, while researching
`
`this issue, I obtained exhibit 1050, which appears related to the patent owner’s
`
`exhibits as they reference the same quantity (242) and weight (445 kg) of the items
`
`documented in the import shipment. Therefore, Ex. 1050 likely documents the
`
`same shipment as Ex. 2074. Ex. 1050 states the consignee is “Coleman Cable.
`
`Inc.” I cannot determine why the patent owner’s documents use a non-existent
`
`consignee.
`
`V.
`
`RIGHT TO SUPPLEMENT
`
`44. Given the short time available, I have not been able to fully complete
`
`my investigation.
`
`I reserve the right to supplement in the future if additional
`
`information is obtained, and to respond to any arguments raised in future.
`
`20
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`Jiawei et al. Exhibit 1055 Page 20
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`
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`I declare that all statements made herein of my own knowledge are true and that all
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`statements made on information and belief are believed to be true; and further that
`
`these statements were made with the knowledge that willful false statements and
`
`the like so made are punishable by fine or imprisonment, or both, under Section
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`1001 of Title 18 of the United States Code.
`
`Dae
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`Jiawei et al. Exhibit 1055 Page 21
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`Jiawei et al. Exhibit 1055 Page 21