Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 1 of 19 PageID #: 5728
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`ALACRITECH, INC.,
`
`
`
`
`
`v.
`
`Plaintiff,
`
`CENTURYLINK, INC., et al.,
`
`
`
`Defendants,
`
`INTEL CORPORATION,
`
`CAVIUM, INC.
`
`Case No. 2:16-cv-693-JRG
`
`LEAD CASE
`
`Jury Trial Demanded
`
`Intervenors.
`
`INTEL CORPORATION’S MOTION TO INTERVENE IN
`ALACRITECH INC. V. WISTRON CORP.,
`CASE NO. 2:16-CV-692
`
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`1
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`Alacritech Ex. 2002, Page 1
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 2 of 19 PageID #: 5729
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`TABLE OF CONTENTS
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`Page
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`FACTUAL BACKGROUND ............................................................................................. 3
`ARGUMENT ...................................................................................................................... 5
`A.
`Intel Is Entitled To Intervene As A Matter Of Right .............................................. 5
`1.
`Intel’s motion to intervene is timely ........................................................... 6
`2.
`Intel has a compelling interest in the Wistron case ..................................... 7
`3.
`The disposition of this action may impair Intel’s ability to protect
`its interests .................................................................................................. 9
`The named defendant cannot adequately represent Intel’s interests ......... 10
`4.
`Alternatively, the Court Should Exercise Its Discretion to Permit Intel to
`Intervene ............................................................................................................... 12
`CONCLUSION ................................................................................................................. 13
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`B.
`
`I.
`II.
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`III.
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`1
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`Alacritech Ex. 2002, Page 2
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 3 of 19 PageID #: 5730
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`TABLE OF AUTHORITIES
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`Page(s)
`
`Cases
`
`Alabama v. U.S. Army Corps of Eng’rs,
`229 F.R.D. 669 (N.D. Ala. 2005) ............................................................................................... 7
`Chandler & Price Co. v. Brandtjen & Kluge, Inc.,
`296 U.S. 53 (1935) ...................................................................................................................... 8
`Chiles v. Thornburgh,
`865 F.2d 1197 (11th Cir. 1989) .............................................................................................. 7, 9
`Codex Corp. v. Milgo Elec. Corp.,
`553 F.2d 735 (1st Cir. 1977) ..................................................................................................... 10
`Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. Co.,
`Civ. A. Nos. B-87-00507-.CA, B-88-00429-CA, 1989 WL 237732
`(E.D. Tex. Feb. 14,1989) .......................................................................................................... 12
`Diaz v. S. Drilling Corp.,
`427 F.2d 1118 (5th Cir. 1970) .................................................................................................... 6
`Edwards v. City of Houston,
`78 F.3d 983 (5th Cir. 1996) ...................................................................................................... 10
`Fisherman’s Harvest, Inc. v. U.S.,
`74 Fed. Cl. 681 (2006) ................................................................................................................ 9
`Honeywell Int’l, Inc. v. Audiovox Commc’ns Corp.,
`No. Civ. A. 04-1337-KAJ et al., 2005 U.S. Dist. LEXIS 22933
`(D. Del. May 18, 2005) ............................................................................................... 5, 8, 10, 11
`IBM Corp. v. Conner Peripherals, Inc.,
`No. C-93-20117, 1994 WL 706208 (N.D. Cal. Dec. 13, 1994) .............................................. 8, 9
`Intellectual Ventures I LLC v. AT&T Mobility LLC,
`2014 WL 4445953 (D. Del. Sept. 8, 2014) (Stark, J.) ................................................................ 8
`Katz v. Lear Siegler, Inc.,
`909 F.2d 1459 (Fed. Cir. 1990) ................................................................................................ 10
`Lemelson v. Larami Corp.,
`No. 80CIV6081, 1981 WL 319072 (S.D.N.Y. Mar. 23, 1981) .................................................. 9
`LG Elecs. Inc. v. Q-Lity Computer, Inc.,
`211 F.R.D. 360 (N.D. Cal. 2002) ................................................................................................ 8
`N.Y. Pub. Interest Research Group, Inc. v. Regents of Univ. of State of N.Y.,
`516 F.2d 350 (2d Cir. 1975) ..................................................................................................... 12
`Reid v. Gen. Motors Corp.,
`240 F.R.D. 257 (E.D. Tex. 2006) ............................................................................................. 13
`
`1
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`Alacritech Ex. 2002, Page 3
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 4 of 19 PageID #: 5731
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`Ross v. Marshall,
`426 F.3d 745 (5th Cir. 2005) ............................................................................................ 6, 7, 10
`Salem Eng’g Co. v. Nat’l Supply Co.,
`75 F. Supp. 993 (W.D. Pa. 1948) .............................................................................................. 13
`Sec. & Exch. Comm’n v. U.S. Realty & Imp. Co.,
`310 U.S. 434 (1940) .................................................................................................................. 12
`Stallworth v. Monsanto Co.,
`558 F.2d 257 (5th Cir. 1977) ...................................................................................................... 6
`State of Texas v. Am. Tobacco Co.,
`No. 5-98CV-270, 1999 WL 1022129 (E.D. Tex. Nov. 5, 1999) .......................................... 7, 12
`Stauffer v. Brooks Bros., Inc.,
`619 F.3d 1321 (Fed. Cir. 2010) .................................................................................................. 5
`Tegic Commc’ns Corp. v. Bd. Of Regents of the Univ. of Tex. Sys.,
`458 F.3d 1335 (Fed. Cir. 2006) .................................................................................................. 8
`Texas v. United States,
`805 F.3d 653 (5th Cir. 2015) ...................................................................................................... 5
`Travelsource Corp. v. Old Republic Int’l Corp.,
`No. 85 C 8116, 1986 WL 3848 (N.D. Ill. Mar. 14, 1986) .......................................................... 7
`U.S. Ethernet Innovations, LLC v. Acer, Inc.,
`No. 6:09-cv-448, Dkt. No. 224 (E.D. Tex. May 10, 2010) ....................................................... 10
`
`Statutes
`
`Fed. R. Civ. P. 24 ............................................................................................................................ 9
`Fed. R. Civ. P. 24(a)(2) ......................................................................................................... 2, 5, 13
`Fed. R. Civ. P. 24(b)(l)(B) .............................................................................................. 2, 5, 12, 13
`Fed. R. Civ. P. 24(c) ....................................................................................................................... 2
`Fed. R. Civ. P. 24, Advisory Committee Notes, 1966 Amendments.............................................. 9
`
`
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`2
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`Alacritech Ex. 2002, Page 4
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 5 of 19 PageID #: 5732
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`INTEL CORPORATION’S MOTION TO INTERVENE IN
`ALACRITECH INC. V. WISTRON CORPORATION, ET AL.
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`Pursuant to Federal Rule of Civil Procedure 24, Intel Corporation (“Intel”) hereby moves
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`to intervene in this action as of right, or alternatively, with permission of the Court. Intel seeks
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`to intervene in this patent infringement action filed by Alacritech, Inc. (“Alacritech”) against,
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`Wistron Corporation, Wiwynn Corporation, SMS Infocomm Corporation, (collectively,
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`“Wistron”), to protect its interests and the interests of its customer Wistron in this action.
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`Intel seeks to intervene in this case because Alacritech has counterclaimed against Intel
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`for infringement in response to Intel’s intervention in the copending Alacritech v. Dell case (No.
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`2:16-cv-695-JRG) (consolidated with this case for pretrial issues). Alacritech has not limited its
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`counterclaims against Intel in the Dell case to products Intel sells to Dell. In infringement
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`contentions served December 24, 2016, Alacritech also accused Intel of infringing the same
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`claims of the same patents Alacritech has asserted against Wistron by selling the same Intel
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`products identified in Alacritech’s infringement contentions against Wistron. These products
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`were not previously at issue in the Dell case.
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`Alacritech accuses Intel of directly and indirectly infringing, which means that Intel’s
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`sales to Wistron, and Wistron’s use of these Intel products are at issue in both cases.
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`Alacritech’s allegations concerning Intel products in the Wistron case overlap completely with
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`allegations against Intel—the same claims of the same patents are asserted against the same Intel
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`products—in the Dell case.
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`Because of this overlap, the same Intel “property or transaction” (Intel products sold to,
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`and purchased by, Wistron) is the subject of both actions, and Intel’s claims and defenses in the
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`Dell case share common questions of law and fact with the Wistron case. Accordingly, Intel
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`1
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`Alacritech Ex. 2002, Page 5
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`seeks to intervene in the Wistron case pursuant to Fed. R. Civ. P. 24 to ensure that Intel’s
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`interests and the interests of Intel’s customer Wistron are protected.
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`Because Intel has already intervened in the Dell case and is actively participating in the
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`consolidated pretrial proceedings, granting this motion will not change the parties or issues
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`involved in pretrial activities, including claim construction. Denying the motion, however,
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`would significantly prejudice Intel and Wistron. If Intel is denied the opportunity to defend its
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`technology against Alacritech’s allegations against Wistron, Alacritech could try to use any
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`outcome in the Wistron case against Intel. Intel may also be subjected to indemnity without Intel
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`having a full and fair opportunity to litigate the issues. Further, since the same transactions and
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`products are at issue in both cases, denying this motion could lead to inconsistent results.
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`Further, Intel has agreed to defend and partially indemnify Wistron for Alacritech’s
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`allegations based on Intel products incorporated into the accused Wistron products. For this
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`reason as well, Intel has a substantial, direct financial interest in the outcome of the Wistron case.
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`For similar reasons, Intel is also moving to intervene in the only remaining Alacritech case,
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`Alacritech v. CenturyLink, et al., Case No. 2:16-cv-693. The CenturyLink case overlaps with
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`Alacritech’s claims against Intel in the Dell case, and Intel will seek a coordinated trial strategy
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`that will avoid three different juries assessing infringement of the same Intel products in three
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`trials before two different judges. The Dell case is assigned to Judge Schroeder while the
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`Wistron and CenturyLink cases are assigned to Judge Gilstrap.
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`Intel therefore requests leave to intervene as of right in this action under Rule 24(a)(2), or
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`in the alternative, seeks the Court’s permission to intervene pursuant to Rule 24(b)(l)(B). In
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`accordance with Rule 24(c), a copy of Intel’s proposed Complaint in Intervention is attached as
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`Exhibit A.
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`2
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`Alacritech Ex. 2002, Page 6
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`The case is at an early stage. On February 23, 2017, Alacritech filed a motion for leave
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`to assert U.S. Patent 7,945,699 against Intel. (Dkt. 135). After close of business on February 24,
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`2017, without leave of Court, Alacritech served amended infringement contentions against Intel
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`adding many new allegations under the ’699 patent and two other patents against a product line
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`not previously accused. (Stephens Decl. ¶¶ 2, 3). Also on February 24, 2017, Alacritech filed
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`new counterclaims of infringement against Intervenor Cavium, a recently-added party to the Dell
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`case. (Dkt. 137).
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`Intel met and conferred with Alacritech’s counsel, seeking to file this motion unopposed.
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`Alacritech would not agree without unilateral conditions that are unwarranted. Due to the
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`parties’ disagreement, Intel could not secure Alacritech’s non-opposition.1 This motion
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`followed.
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`I.
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`FACTUAL BACKGROUND
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`Alacritech’s Complaint alleges that Wistron has infringed all of the seven patents asserted
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`against Wistron based on its making, using, selling, offering for sale, and/or importing “the
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`NM10GS with Intel X550-AT2 Controller” among other products. Further, Alacritech’s
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`infringement allegations focus on Intel’s 82599 Ethernet Controller, including the “Receive Side
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`Coalescing (RSC)” and “TCP and UDP Segmentation” offloading (TSO) features described in
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`the Intel 82599 Datasheet, which is cited extensively throughout Alacritech’s infringement
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`contentions against Wistron. Alacritech’s infringement allegations expressly implicate Intel’s
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`products and harm Intel by creating an infringement controversy over its networking technology.
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`1 Alacritech demanded that Intel agree not to seek any changes to the docket control order.
`However, Alacritech at the same time informed Intel it wished to add a previously unaccused
`Intel product line to its allegations against Intel. It has since sought to add not only a new
`product line, but a new patent. This expansion of the number of patents, claims and product lines
`at issue means that the existing schedule is no longer workable.
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`3
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`Alacritech Ex. 2002, Page 7
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`Intel filed its complaint in intervention in the Dell case on November 22, 2016, eight days
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`after first seeing Alacritech’s infringement contentions against Dell. (Dkt. 85, Stephens Decl. ¶
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`4) Alacritech had contended (until the Court ruled otherwise) that its infringement contentions
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`were confidential, even though they rely only on publicly available material. Alacritech filed its
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`Answer along with counterclaims against Intel on December 13, 2016 (Dkt. 94), and served
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`infringement contentions on Intel on December 24, 2016. Alacritech’s counterclaims against
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`Intel in the Dell case include allegations that Intel products, which Intel sells to Wistron, and
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`which Wistron incorporates into its own accused products, infringe the same claims of the same
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`patents that Alacritech has asserted against Wistron in this suit. These allegations in the Dell
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`case include Intel products not previously accused of infringing in the Dell case, and cover every
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`Intel product at issue in this lawsuit against Wistron. Therefore, the accused products Intel sells
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`to Wistron, and Wistron’s use of those products, are accused of infringing in both the Dell case
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`and the Wistron case.
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`For example, Alacritech accuses Wistron of infringing its seven asserted patents based in
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`part on Wistron’s use of Intel’s 82547L Ethernet controller, Intel’s I210-AT Ethernet controller,
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`and Intel’s X550-AT2 Ethernet controller. (Stephens Decl. ¶ 5). Alacritech had not made any
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`allegations concerning these Intel products in the Dell case before filing its counterclaims against
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`Intel. (Stephens Decl. ¶ 6). Alacritech’s counterclaims allege that Intel directly infringes
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`Alacritech’s patents by selling these products, and indirectly infringes by inducing Intel
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`customers (e.g. Wistron) to use them in an allegedly infringing manner. (Dkt. 94 at, e.g., ¶¶ 7,
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`35, 49, 63, 77, 91, 105, 119).
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`4
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`Alacritech Ex. 2002, Page 8
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`All of the Intel products identified in Alacritech’s infringement contentions against
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`Wistron are accused of infringing the same claims of the same patents in Alacritech’s
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`infringement contentions against Intel in the Dell case. (Stephens Decl. ¶ 7).
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`II.
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`ARGUMENT
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`Intel is entitled to intervene in this action as a matter of right pursuant to Rule 24(a)(2).
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`Alternatively, the Court should permit Intel to intervene under Rule 24(b)(1)(B).
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`A.
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`Intel Is Entitled To Intervene As A Matter Of Right
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`Rule 24(a)(2) permits intervention on timely motion by anyone who:
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`claims an interest relating to the property or transaction that is the subject
`of the action, and is so situated that disposing of the action may as a
`practical matter impair or impede the movant’s ability to protect its
`interest, unless existing parties adequately represent that interest.
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`Fed. R. Civ. P. 24(a)(2). Four factors are considered in assessing intervention as a matter of
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`right: (1) the timeliness of the request; (2) the potential intervenor’s interest relating to the
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`property or transaction that is the subject of the action; (3) the possibility of impairment to the
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`potential intervenor’s ability to protect its interest absent intervention; and (4) the adequacy of
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`the representation of the potential intervenor’s interest by the existing parties. See Texas v.
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`United States, 805 F.3d 653, 657 (5th Cir. 2015).2 In the Fifth Circuit, intervention should be
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`permitted where “no one would be hurt and the greater justice could be attained.” Id. Where the
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`intervenor’s interest is substantial, for example where a manufacturer seeks to intervene in a suit
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`brought against its customer, the intervenor’s interest is to be given greater weight. See, e.g.,
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`Honeywell Int’l, Inc. v. Audiovox Commc’ns Corp., No. Civ. A. 04-1337-KAJ et al., 2005 U.S.
`
`Dist. LEXIS 22933, at *9-10 (D. Del. May 18, 2005).
`
`
`2 Because intervention is not unique to patent law, regional circuit law applies. See Stauffer v.
`Brooks Bros., Inc., 619 F.3d 1321, 1328 (Fed. Cir. 2010).
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`5
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`Alacritech Ex. 2002, Page 9
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`The inquiry is a flexible one, which “must be measured by a practical rather than
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`technical yardstick.” Ross v. Marshall, 426 F.3d 745, 753 (5th Cir. 2005). Thus, for example,
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`intervention is proper when the prejudice to the potential intervenor outweighs the potential
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`prejudice to the remaining parties, particularly where there have been no legally significant
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`proceedings other than discovery. See Diaz v. S. Drilling Corp., 427 F.2d 1118, 1125-56 (5th
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`Cir. 1970); Ross, 426 F.3d at 753.
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`As explained below, the requirements for Intel’s intervention into the CenturyLink and
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`Wistron cases, which are both related to the Dell suit in which Intel has intervened and is now
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`pending before Judge Schroeder, are satisfied.
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`1.
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`Intel’s motion to intervene is timely
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`When evaluating whether a motion to intervene is timely, the Fifth Circuit has “set forth
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`four factors that must be considered,” including: (1) the length of time from notice of the
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`intervenor’s interest to the filing of the motion to intervene, (2) the extent of prejudice to existing
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`parties as a result of the timing of the motion, (3) the extent of prejudice to the intervenor if leave
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`is denied, and (4) the existence of other special circumstances (if any). See Ross, 426 F.3d at 754
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`(citing Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir. 1977)).
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`This case is at an early stage. Alacritech is currently seeking to add many new
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`allegations of infringement against Intel, including a new patent and product line and previously
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`unaccused technologies, and served hundreds of pages of new infringement contentions without
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`leave of Court after the close of business on Friday, February 24, 2017. (Dkt. 135, Stephens
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`Decl. ¶ 3). Later the same evening, Alacritech filed an Answer and Counterclaims against
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`Cavium including allegations of infringement under eight patents. (Dkt. 137). Like Intel,
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`Cavium is a Dell supplier whose components are at issue and who intervened in the Dell case.
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`There have been no legally significant proceedings other than discovery and the exchange of
`6
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`Alacritech Ex. 2002, Page 10
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 11 of 19 PageID #: 5738
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`preliminary claim constructions under P.R. 4-2 (in which Intel participated), and no fact witness
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`depositions have been taken to date. The timing of Intel’s intervention in the Wistron case will
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`not prejudice any of the existing parties. Intel’s motion to intervene is timely.3
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`2.
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`Intel has a compelling interest in the Wistron case
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`“A party has an interest relating to the subject matter of an action when it has a ‘direct,
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`substantial, legally protectable interest in the proceedings.’” State of Texas v. Am. Tobacco Co.,
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`No. 5-98CV-270, 1999 WL 1022129, at *2 (E.D. Tex. Nov. 5, 1999). “[T]he interest ‘test’ is
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`primarily a practical guide to disposing of lawsuits by involving as many apparently concerned
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`persons as is compatible with efficiency and due process.” Ross, 426 F.3d at 757 (citations
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`omitted).
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`Alacritech’s December 2016 counterclaims against Intel in the Dell case accuse Intel of
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`infringement for sales of components that Intel sells to Wistron. In this case, Alacritech
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`similarly accuses Wistron for using and reselling those same Intel components. Alacritech also
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`accuses Intel of indirect infringement in the Dell case based on Intel customers’ (including
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`Wistron’s) alleged direct infringement. Intel therefore clearly has a direct, substantial, legally
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`protectable interest in this case.
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`Courts routinely grant intervention as of right in patent actions where, as here, accused
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`products incorporate components manufactured by the intervening party. See Chandler & Price
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`3 Ross, 426 F.3d at 756 (unless some result can be demonstrated that would not have occurred
`“but-for” the intervenor’s failure to file its motion to intervene earlier, there is no prejudice to the
`other parties); Chiles v. Thornburgh, 865 F.2d 1197, 1213 (11th Cir. 1989) (motion to intervene
`was timely when filed before discovery had begun); Alabama v. U.S. Army Corps of Eng’rs, 229
`F.R.D. 669, 672 (N.D. Ala. 2005) (motion to intervene was timely when court had not yet
`conducted proceedings on the merits and intervention would not delay the proceedings);
`Travelsource Corp. v. Old Republic Int’l Corp., No. 85 C 8116, 1986 WL 3848, at *2 (N.D. Ill.
`Mar. 14, 1986) (motion to intervene was timely because suit was only six months old and no
`pleadings had been filed other than the Complaint and Answer).
`
`7
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`Alacritech Ex. 2002, Page 11
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`Co. v. Brandtjen & Kluge, Inc., 296 U.S. 53, 55 (1935) (manufacturer’s intervention in patent
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`infringement action against its customers was “necessary for the protection of its interest”);
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`Tegic Commc’ns Corp. v. Bd. Of Regents of the Univ. of Tex. Sys., 458 F.3d 1335, 1344 (Fed.
`
`Cir. 2006) (“[T]o the extent that [the interest of the manufacturer of allegedly infringing
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`products] may be impaired by the Texas litigation, [the manufacturer] may seek to intervene in
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`that litigation.”); Honeywell, 2005 U.S. Dist. LEXIS 22933, at *9-10 (“It is impracticable to try
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`an infringement case against 40 some defendants or third-party defendants with many different
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`accused devices, and it is unwise to attempt any such thing when liability depends exclusively
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`upon infringement being found as to an LCD component that the defendants do not manufacture
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`and when at least some of the manufacturers of the LCDs are before the court and are willing to
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`stand behind their products in this litigation.”).4
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`As the developer and manufacturer of much of the accused networking technology in
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`dispute in all three of these related cases (as shown by Alacritech’s almost complete reliance in
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`its infringement contentions on claim charts against an Intel component), Intel has a direct and
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`substantial interest in defending its technology and litigating Alacritech’s allegations concerning
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`its products. See Intellectual Ventures I LLC v. AT&T Mobility LLC, 2014 WL 4445953, at *2
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`(D. Del. Sept. 8, 2014) (Stark, J.) (“[I]ntervention is necessary to enable Intervenors to protect
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`their interest in products which Intervenors manufacture for Defendants, an interest put at risk by
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`the litigation as Plaintiffs accuse these products of infringement.”).
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`4 Accord LG Elecs. Inc. v. Q-Lity Computer, Inc., 211 F.R.D. 360, 365 (N.D. Cal. 2002) (“[An
`intervening manufacturer] has more than a speculative economic interest, as the products that it
`sells will be at the heart of the [patent infringement] litigation”); IBM Corp. v. Conner
`Peripherals, Inc., No. C-93-20117, 1994 WL 706208, at *5 (N.D. Cal. Dec. 13, 1994)
`(intervening manufacturer “played an important role in manufacturing and designing the
`controllers that allegedly infringed” and “should be able to present facts relevant to whether the
`controllers actually did infringe”).
`
`8
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`Alacritech Ex. 2002, Page 12
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 13 of 19 PageID #: 5740
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`Additionally, Intel has a direct financial stake in the suit due to its partial indemnification
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`of Wistron. See Fisherman’s Harvest, Inc. v. U.S., 74 Fed. Cl. 681, 685 (2006) (“An indemnitor
`
`may be allowed to intervene in a lawsuit brought against an indemnitee in order to protect its
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`interest under an indemnity agreement.”) (internal citations omitted); IBM, 1994 WL 706208, at
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`*5 (patent infringement claims against an indemnitee are in effect claims against the indemnitor);
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`Lemelson v. Larami Corp., No. 80CIV6081, 1981 WL 319072 (S.D.N.Y. Mar. 23, 1981)
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`(permitting intervention in patent infringement action by manufacturer that had an
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`indemnification obligation).
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`3.
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`The disposition of this action may impair Intel’s ability to protect its
`interests
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`The nature of the intervenor’s interest and the effect that the outcome of the case will
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`have on its ability to protect that interest are closely-related factors for determining whether to
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`grant a motion to intervene. Chiles, 865 F.2d at 1214. As a general rule, “[i]f an absentee would
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`be substantially affected in a practical sense by the determination made in an action, he should...
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`be entitled to intervene.” Fed. R. Civ. P. 24, Fed. R. Civ. P. 24, Advisory Committee Notes,
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`1966 Amendments.
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`Intel’s ability to protect its interests will be significantly impaired if it cannot also
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`intervene in this related case to the Dell suit (in which Intel is already a party) and in which
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`Alacritech has asserted broad counterclaims encompassing the range of Intel products at issue in
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`this case. If Wistron were found to directly infringe in this case based on its use of Intel’s
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`products, there is a clear interrelation with Alacritech’s case against Intel for direct and indirect
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`infringement by those same Intel products used by Wistron. Further, Intel may be liable to
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`Wistron for indemnity. Importantly, since the same transactions and property are at issue in both
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`cases, conflicting results could arise if Intel is not permitted to intervene.
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`9
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`Alacritech Ex. 2002, Page 13
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 14 of 19 PageID #: 5741
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`A manufacturer has a strong interest in being heard in a patent infringement action where
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`the accused products incorporate its components. See Honeywell Int’l., 2005 U.S. Dist. LEXIS
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`22933, at *12-13 (in a patent infringement action, a manufacturer’s interests “will be impaired or
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`affected, as a practical matter, by the disposition of the action, unless it is involved in the case
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`directly and able to make its positions known”). An adverse ruling could also substantially
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`damage Intel’s reputation, its relationships with its other customers, and its future customer base.
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`See U.S. Ethernet Innovations, LLC v. Acer, Inc., No. 6:09-cv-448, Dkt. No. 224 at 4 (E.D. Tex.
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`May 10, 2010) (explaining that “a manufacturer” could face injury such as “the loss of its
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`customer base and reputation as a result of patent infringement allegations.”); Katz v. Lear
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`Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990) (“it is a simple fact of life that a manufacturer
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`must protect its customers, either as a matter of contract, or good business, or in order to avoid
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`the damaging impact of an adverse ruling against its products”) (citing Codex Corp. v. Milgo
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`Elec. Corp., 553 F.2d 735 (1st Cir. 1977)).
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`4.
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`The named defendant cannot adequately represent Intel’s interests
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`In assessing whether representation by the existing parties is adequate, a potential
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`intervenor need only show that “representation by the existing parties may be inadequate.” Ross,
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`426 F.3d at 761 (emphasis added). Indeed, the Fifth Circuit has described the potential
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`intervenor’s burden as “minimal.” Id.; see also Edwards v. City of Houston, 78 F.3d 983, 1005
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`(5th Cir. 1996) (minimal burden of would-be intervenor to show inadequate representation met
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`by showing that representation by existing parties “may” be inadequate).
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`A manufacturer such as Intel has a greater interest than its customers in defending
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`allegations of patent infringement focused on its products. It would be unfair to expect Intel to
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`rely on a customer to fully protect Intel’s interests, particularly when the customer is partially
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`indemnified. In practice, it makes more sense for the manufacturer of the parts, rather than the
`10
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`Alacritech Ex. 2002, Page 14
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`

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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 15 of 19 PageID #: 5742
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`customer who uses those parts, to litigate issues such as infringement. Honeywell, 2005 U.S.
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`Dist. LEXIS 22933, at *11 (“[F]rom the perspective of the host of defendants [plaintiff] has
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`chosen to sue, and in the interest of judicial economy, dealing with the manufacturers first is the
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`fairest and most efficient way to proceed.”). In Honeywell, for example, the court found that
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`because the manufacturer was uniquely situated to understand and defend its own products, its
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`interests were not adequately represented by existing parties to the litigation, even though the
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`manufacturer’s customers had an interest in defending against the allegations of infringement.
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`Id. at *13.
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`Further, Intel is in a better position to defend against infringement allegations focused on
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`Intel products because it has the relevant knowledge and expertise regarding its own technology.
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`While Wistron incorporates Intel’s highly complex networking technology components into its
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`own products, it does not design or manufacture those components. Many of Alacritech’s
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`allegations are directed to features conceived, designed and implemented by Intel on the chips
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`Wistron uses in its products. As such, Intel is in a better position to assert all applicable defenses
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`relevant to its technology. Id. at *4 (because a manufacturer “is uniquely situated to understand
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`and defend its own product, its interests are not adequately represented by existing parties to the
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`litigation”).
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`Moreover, Intel has a compelling interest in seeing the case through judgment and fully
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`addressing the merits of Alacritech’s claims against Intel’s products. Because the cost of patent
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`litigation is high and often forces parties into settlement before the merits are fully addressed, a
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`customer may not have as great an interest as a manufacturer, such as Intel, in fully litigating the
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`case to obtain findings of non-infringement. Intervention as of right should be granted to one
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`who may potentially present a “more vigorous presentation” of its interests than the existing
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`11
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`Alacritech Ex. 2002, Page 15
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`Case 2:16-cv-00693-JRG-RSP Document 151 Filed 03/14/17 Page 16 of 19 PageID #: 5743
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`parties. N.Y. Pub. Interest Research Group, Inc. v. Regents of Univ. of State of N.Y., 516 F.2d
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`350, 352 (2d Cir. 1975).
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`B.
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`Alternatively, the Court Should Exercise Its Discretion to Permit Int