Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 1 of 20 PageID #: 1757
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`ALACRITECH, INC., A California
`corporation,
`
`Plaintiff,
`
`v.
`
`TIER 3, ET AL.,
`
`2:16-cv-00693-JRG (LEAD CASE)
`
`WISTRON CORPORATION ET AL.,
`
`DELL INC., A Delaware corporation,
`
`2:16-cv-00692-JRG
`
`2:16-cv-00695-JRG
`
`Defendants.
`
`JURY TRIAL DEMANDED
`
`INTEL CORPORATION’S MOTION TO INTERVENE
`
`EX. 2002.001
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 2 of 20 PageID #: 1758
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`TABLE OF CONTENTS
`
`Page
`
`I. 
`
`FACTUAL BACKGROUND ............................................................................................. 3 
`
`A. 
`
`B. 
`
`C. 
`
`This Case Is At An Early Stage .............................................................................. 3 
`
`This Action Implicates Intel Products Sold To Dell And Other Intel
`Customers ............................................................................................................... 4 
`
`Intel Has Agreed to Partially Indemnify Dell Against Claims that Its Intel-
`Based Products Infringe Alacritech’s Patents ......................................................... 4 
`
`II.
`
`ARGUMENT ...................................................................................................................... 5
`
`A. 
`
`Intel Is Entitled To Intervene As A Matter Of Right .............................................. 5 
`
`1.
`
`2.
`
`3.
`
`4.
`
`Intel’s motion to intervene is timely ........................................................... 6
`
`Intel has a compelling interest in the litigation ........................................... 7
`
`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
`
`B. 
`
`Alternatively, the Court Should Exercise Its Discretion to Permit Intel to
`Intervene ............................................................................................................... 12 
`
`III.
`
`CONCLUSION ................................................................................................................. 13
`
`i
`
`EX. 2002.002
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`

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`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 3 of 20 PageID #: 1759
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases 
`
`Alabama v. U.S. Army Corps of Eng’rs,
`229 F.R.D. 669 (N.D. Ala. 2005) ............................................................................................... 6
`
`Alacritech Inc. v. CenturyLink, Inc.,
`CA No. 2:16-cv-00693-JRG (Lead Case) ............................................................................... 2, 3
`
`Alacritech Inc. v. Wistron Corporation et. al.,
`CA No. 2:16-cv-00692 ........................................................................................................... 2, 3
`
`Chandler & Price Co. v. Brandtjen & Kluge, Inc.,
`296 U.S. 53 (1935) ...................................................................................................................... 7
`
`Chiles v. Thornburgh,
`865 F.2d 1197 (11th Cir. 1989) .............................................................................................. 6, 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) .................................................................................................... 5
`
`Edwards v. City of Houston,
`78 F.3d 983 (5th Cir. 1996) ...................................................................................................... 10
`
`Engineered Sports Prods. v. Brunswick Corp.,
`362 F. Supp. 722 (D. Utah 1973) ................................................................................................ 8
`
`Fisherman’s Harvest, Inc. v. U.S.,
`74 Fed. Cl. 681 (2006) ................................................................................................................ 8
`
`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, 7, 9, 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
`ii
`
`EX. 2002.003
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 4 of 20 PageID #: 1760
`
`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, 13
`
`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
`
`Ross v. Marshall,
`426 F.3d 745 (5th Cir. 2005) ........................................................................................ 5, 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) .................................................................................................................. 13
`
`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) .................................................................................................. 7
`
`Texas v. United States,
`805 F.3d 653 (5th Cir. 2015) .................................................................................................. 4, 5
`
`Travelsource Corp. v. Old Republic Int’l Corp.,
`No. 85 C 8116, 1986 WL 3848 (N.D. Ill. Mar. 14, 1986) .......................................................... 6
`
`U.S. Ethernet Innovations, LLC v. Acer, Inc.,
`No. 6:09-cv-448, Dkt. No. 224 (E.D. Tex. May 10, 2010) ................................................. 10, 13
`
`Statutes 
`
`Fed. R. Civ. P. 24 ............................................................................................................................ 8
`
`iii
`
`EX. 2002.004
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 5 of 20 PageID #: 1761
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`Fed. R. Civ. P. 24(a)(2) ......................................................................................................... 2, 4, 12
`
`Fed. R. Civ. P. 24(b)(l)(B) .............................................................................................. 2, 4, 10, 12
`
`Fed. R. Civ. P. 24(c) ....................................................................................................................... 2
`
`Fed. R. Civ. P. 24, Advisory Committee Notes, 1966 Amendments.............................................. 8
`
`
`
`
`
`
`iv
`
`EX. 2002.005
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 6 of 20 PageID #: 1762
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`INTEL CORPORATION’S MOTION TO INTERVENE
`
`Pursuant to Federal Rule of Civil Procedure 24, Intel Corporation (“Intel”) hereby moves
`
`to intervene in this action as of right, or alternatively, with permission of the Court. Intel seeks
`
`to intervene in this patent infringement action filed by Alacritech, Inc. (“Alacritech”) to protect
`
`its interests and the interests of its customer, Dell Inc. (“Dell”), the defendant in this action. Intel
`
`seeks to intervene because many of Alacritech’s infringement allegations in the Complaint
`
`against Dell target networking technology that Intel supplied to Dell. Indeed, the Complaint in
`
`this action specifically accuses certain Dell products of infringement based on their use of Intel
`
`Ethernet cards and controllers, including Intel’s 82599 Ethernet Controller. Further, Intel has
`
`agreed to defend and partially indemnify Dell as to Alacritech’s allegations based on Intel
`
`components incorporated into the accused Dell products. As such, Intel has a substantial, direct
`
`financial interest in the outcome of this litigation.
`
`Intel and Dell have sought Alacritech’s permission for Dell to share Alacritech’s
`
`infringement contentions concerning Intel components with Intel since Alacritech served them
`
`on September 9, 2016, designated as “Confidential” under this Court’s protective order.
`
`Alacritech has repeatedly refused, most recently on October 21, 2016 in meeting and conferring
`
`with Intel on this motion.1 As Intel and Dell have told Alacritech, lack of access to Alacritech’s
`
`contentions has inhibited Intel from fully assessing the scope of Alacritech’s allegations
`
`concerning Intel components and the extent of Intel’s indemnity obligations. Nevertheless, to
`
`avoid delay, Intel now voluntarily seeks to intervene to defend its products and its customer Dell
`
`based on the allegations in the Complaint.
`
`
`1 [Stephens Declaration Ex. 2 (email dated October 21, 2016 from Claude Stern to Garland
`Stephens)]. The discussion of Alacritech’s infringement allegations in this Motion is thus
`limited to the allegations in Alacritech’s Complaint.
`
`1
`
`EX. 2002.006
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 7 of 20 PageID #: 1763
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`Intel can offer unique technical knowledge and expertise as the designer and
`
`manufacturer of the Intel networking technology targeted by Alacritech’s infringement
`
`allegations. Should Alacritech subsequently sue other Intel customers, Intel’s interest in the
`
`issues to be litigated here, such as claim interpretation and infringement based on Intel
`
`components, will extend beyond this case to those future actions. Additionally, this case is still
`
`at a very early stage and granting Intel leave to intervene would not prejudice any of the parties.
`
`Denying the motion, however, would significantly prejudice Intel and other companies
`
`that use Intel products. If Intel is denied the opportunity to defend its technology against
`
`Alacritech’s allegations, Intel could be subjected to indemnity liability and a cloud of uncertainty
`
`could be cast over Intel’s products without Intel ever having a full and fair opportunity to litigate
`
`the issues.
`
`Intel therefore requests leave to intervene as of right in this action under Rule 24(a)(2), or
`
`in the alternative, seeks the Court’s permission to intervene pursuant to Rule 24(b)(l)(B). In
`
`accordance with Rule 24(c), a copy of Intel’s proposed Complaint in Intervention is attached as
`
`Exhibit A.
`
`Intel met and conferred with Alacritech’s counsel, seeking to file this motion unopposed.
`
`Due to the parties’ disagreement as to certain procedural matters (such as protections for Intel
`
`source code) and scheduling issues governed by Alacritech’s discretion over the scope of
`
`counterclaims it might bring against Intel, Intel could not secure Alacritech’s non-opposition.2
`
`This motion followed.
`
`
`2 Alacritech demanded Intel agree not to seek any changes to the docket control order, a matter
`that will be driven primarily by Alacritech’s counterclaims, if any. Alacritech also demanded
`that Intel agree not to seek any changes to the protective order and discovery order, neither of
`which provide for Intel or any intervening supplier. The latter discovery-related issues are
`
`
`2
`
`EX. 2002.007
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 8 of 20 PageID #: 1764
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`I.
`
`FACTUAL BACKGROUND
`
`A.
`
`This Case Is At An Early Stage
`
`Alacritech’s Complaint against Dell was filed on June 30, 2016, alleging infringement of
`
`eight patents that relate to networking technology.3 Alacritech also filed two complaints against
`
`other defendants on the same day, CenturyLink, Inc. and Wistron Corporation, which also
`
`contained infringement allegations directed to Intel networking products.4 All three cases have
`
`been consolidated for pretrial matters except for venue.5 Dell answered the Complaint on
`
`August 25, 2016. [Dkt. 27]. Alacritech filed an Amended Complaint against three CenturyLink
`
`subsidiaries on August 26, 2016. [Dkt. 29].
`
` On September 9, 2016, Alacritech served infringement contentions, marking them
`
`“Confidential” in their entirety. To date, Alacritech has refused to allow any defendant to share
`
`the contentions with Intel. [Stephens Declaration, ¶2-4].
`
`On September 15, 2016, this Court entered a docket control order setting jury selection
`
`for December 4, 2017.
`
`Wistron answered and counterclaimed against Alacritech on October 24, 2016. [Dkt. 68].
`
`Alacritech has not yet answered Wistron’s counterclaims. No depositions have yet been taken
`
`by any party.
`
`readily addressable and should not affect the schedule. [Stephens Declaration Ex. 1 (email dated
`October 21, 2016 from Garland Stephens to Claude Stern)].
`
`3 [Dkt. 1]. Specifically, U.S. Patent Nos. 7,124,205; 7,237,036; 7,337,241; 7,673,072;
`7,945,699; 8,131,880; 8,805,948; 9,055,104.
`
`4 Alacritech Inc. v. CenturyLink, Inc., CA No. 2:16-cv-00693-JRG (Lead Case) [Dkt. 1];
`Alacritech Inc. v. Wistron Corporation et. al., CA No. 2:16-cv-00692 [Dkt. 1].
`
`5 Alacritech Inc. v. CenturyLink, Inc., CA No. 2:16-cv-00693-JRG (Lead Case) [Dkt. 8].
`
`3
`
`EX. 2002.008
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 9 of 20 PageID #: 1765
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`B.
`
`This Action Implicates Intel Products Sold To Dell And Other Intel
`Customers
`
`Intel manufactures and sells networking components — including the Intel 82599
`
`Ethernet Controller and many other Ethernet controllers and adapters — that enable computers to
`
`connect to and communicate with networks and the Internet. Customers such as Dell incorporate
`
`these network interface components into certain of the products that Alacritech accuses of
`
`infringement. In fact, Alacritech’s Complaint alleges that Dell has infringed seven of the eight
`
`asserted patents based on its making, using, selling, offering for sale, and/or importing “the Intel
`
`Ethernet Network Daughter Card X520-DA2 /1350-T2,” among other products.6 Further,
`
`Alacritech’s infringement allegations focus on Intel’s 82599 Ethernet Controller, including the
`
`“Receive Side Coalescing (RSC)” and “TCP and UDP Segmentation” offloading (TSO) features
`
`described in the Intel 82599 Datasheet, which is cited extensively throughout the Complaint.7
`
`Alacritech’s infringement allegations expressly implicate Intel’s products and harm Intel by
`
`creating an infringement controversy over its networking technology.8
`
`C.
`
`Intel Has Agreed To Partially Indemnify Dell Against Claims That Its Intel-
`Based Products Infringe Alacritech’s Patents
`
`After Alacritech filed its Complaint, Dell tendered a contractual claim that Intel
`
`indemnify and hold it harmless against Alacritech’s claims based on an indemnity agreement
`
`involving the purchase of Intel products. Despite Alacritech’s ongoing refusal to allow Intel
`
`6 [Complaint (Dkt. 1), ¶35, 49, 62, 75, 101, 114, 127].
`
`7 See, e.g., [Dkt. 1, ¶35, 49, 62, 75, 101, 114, 127].
`
`8 Alacritech’s infringement allegations in the consolidated CenturyLink and Wistron cases also
`expressly identify Intel products, specifically the Intel 82599 Controller and the Intel X550
`Controller, respectively. See Alacritech Inc. v. CenturyLink, Inc., CA No. 2:16-cv-00693-JRG
`(Lead Case) [Dkt. 1]; Alacritech Inc. v. Wistron Corporation et. al., CA No. 2:16-cv-00692 [Dkt.
`1].
`
`4
`
`EX. 2002.009
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 10 of 20 PageID #: 1766
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`access to its infringement contentions against Dell, to avoid delay, Intel has agreed to defend and
`
`partially indemnify Dell. [Kyriacou Declaration ¶¶ 2-3].
`
`II.
`
`ARGUMENT
`
`Intel is entitled to intervene in this action as a matter of right pursuant to Rule 24(a)(2).
`
`Alternatively, the Court should permit Intel to intervene under Rule 24(b)(1)(B).
`
`A.
`
`Intel Is Entitled To Intervene As A Matter Of Right
`
`Rule 24(a)(2) permits intervention on timely motion by anyone who:
`
`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.
`
`Fed. R. Civ. P. 24(a)(2). Four factors are considered in assessing intervention as a matter of
`
`right: (1) the timeliness of the request; (2) the potential intervenor’s interest relating to the
`
`property or transaction that is the subject of the action; (3) the possibility of impairment to the
`
`potential intervenor’s ability to protect its interest absent intervention; and (4) the adequacy of
`
`the representation of the potential intervenor’s interest by the existing parties. See Texas v.
`
`United States, 805 F.3d 653, 657 (5th Cir. 2015).9 In the Fifth Circuit, intervention should be
`
`permitted where “no one would be hurt and the greater justice could be attained.” Id. Where the
`
`intervenor’s interest is substantial, for example where a manufacturer seeks to intervene in a suit
`
`brought against its customer, the intervenor’s interest is to be given greater weight. See, e.g.,
`
`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).
`
`
`9 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).
`
`5
`
`EX. 2002.010
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 11 of 20 PageID #: 1767
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`The inquiry is a flexible one, which “must be measured by a practical rather than
`
`technical yardstick.” Ross v. Marshall, 426 F.3d 745, 753 (5th Cir. 2005). Thus, for example,
`
`intervention is proper when the prejudice to the potential intervenor outweighs the potential
`
`prejudice to the remaining parties, particularly where there have been no legally significant
`
`proceedings other than discovery. See Diaz v. S. Drilling Corp., 427 F.2d 1118, 1125-56 (5th
`
`Cir. 1970); Ross, 426 F.3d at 753.
`
`As explained below, Intel satisfies the requirements for intervention as a matter of right.
`
`1.
`
`Intel’s motion to intervene is timely
`
`When evaluating whether a motion to intervene is timely, the Fifth Circuit has “set forth
`
`four factors that must be considered,” including: (1) the length of time from notice of the
`
`intervenor’s interest to the filing of the motion to intervene, (2) the extent of prejudice to existing
`
`parties as a result of the timing of the motion, (3) the extent of prejudice to the intervenor if leave
`
`is denied, and (4) the existence of other special circumstances (if any). See Ross, 426 F.3d at 754
`
`(citing Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir. 1977)).
`
`Here, Intel is seeking to intervene at an early stage of the litigation. Alacritech filed its
`
`Complaint against Dell four months ago. A Docket Control Order has only recently issued. [Dkt.
`
`43 (dated September 15, 2016)]. A motion to dismiss is pending in the consolidated Century
`
`Link case [Dkt. 44]; other parties have yet to answer an amended complaint. If Alacritech did
`
`not refuse to allow Intel or its outside counsel access to Alacritech’s September 9, 2016
`
`infringement contentions (a designation being formally challenged by the Defendants), Intel
`
`6
`
`EX. 2002.011
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 12 of 20 PageID #: 1768
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`could have moved to intervene earlier still. The timing of Intel’s intervention will not prejudice
`
`any of the existing parties. There is no question that Intel’s motion to intervene is timely.10
`
`2.
`
`Intel has a compelling interest in the litigation
`
`“A party has an interest relating to the subject matter of an action when it has a ‘direct,
`
`substantial, legally protectable interest in the proceedings.’” State of Texas v. Am. Tobacco Co.,
`
`No. 5-98CV-270, 1999 WL 1022129, at *2 (E.D. Tex. Nov. 5, 1999). “[T]he interest ‘test’ is
`
`primarily a practical guide to disposing of lawsuits by involving as many apparently concerned
`
`persons as is compatible with efficiency and due process.” Ross, 426 F.3d at 757 (citations
`
`omitted).
`
`Courts routinely grant intervention as of right in patent actions where, as here, accused
`
`products incorporate components manufactured by the intervening party. See Chandler & Price
`
`Co. v. Brandtjen & Kluge, Inc., 296 U.S. 53, 55 (1935) (manufacturer’s intervention in patent
`
`infringement action against its customers was “necessary for the protection of its interest”);
`
`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
`
`products] may be impaired by the Texas litigation, [the manufacturer] may seek to intervene in
`
`that litigation.”); Honeywell, 2005 U.S. Dist. LEXIS 22933, at *9-10 (“It is impracticable to try
`
`an infringement case against 40 some defendants or third-party defendants with many different
`
`10 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
`
`EX. 2002.012
`
`

`

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`accused devices, and it is unwise to attempt any such thing when liability depends exclusively
`
`upon infringement being found as to an LCD component that the defendants do not manufacture
`
`and when at least some of the manufacturers of the LCDs are before the court and are willing to
`
`stand behind their products in this litigation.”).11
`
`As the developer and manufacturer of much of the accused networking technology in
`
`dispute, Intel has a direct and substantial interest in defending its technology and litigating
`
`Alacritech’s allegations concerning its products. See Intellectual Ventures I LLC v. AT&T
`
`Mobility LLC, 2014 WL 4445953, at *2 (D. Del. Sept. 8, 2014) (Stark, J.) (“[I]ntervention is
`
`necessary to enable Intervenors to protect their interest in products which Intervenors
`
`manufacture for Defendants, an interest put at risk by the litigation as Plaintiffs accuse these
`
`products of infringement.”).
`
`Additionally, Intel has a direct financial stake in the suit due to its partial indemnification
`
`of Dell. 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
`
`interest under an indemnity agreement.”) (internal citations omitted); IBM, 1994 WL 706208, at
`
`*5 (patent infringement claims against an indemnitee are in effect claims against the indemnitor);
`
`Lemelson v. Larami Corp., No. 80CIV6081, 1981 WL 319072 (S.D.N.Y. Mar. 23, 1981)
`
`(permitting intervention in patent infringement action by manufacturer that had an
`
`indemnification obligation). Moreover, Intel has many other customers that incorporate its
`
`11 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
`
`EX. 2002.013
`
`

`

`Case 2:16-cv-00693-JRG-RSP Document 71 Filed 10/31/16 Page 14 of 20 PageID #: 1770
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`networking technology into their products. Consequently, the potential impact of this litigation
`
`on Intel and its customers may extend beyond claims made by those named in this suit.
`
`3.
`
`The disposition of this action may impair Intel’s ability to protect its
`interests
`
`The nature of the intervenor’s interest and the effect that the outcome of the case will
`
`have on its ability to protect that interest are closely-related factors for determining whether to
`
`grant a motion to intervene. Chiles, 865 F.2d at 1214. As a general rule, “[i]f an absentee would
`
`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 intervene.
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`A manufacturer has a strong interest in being heard in a patent infringement action where the
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`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)). Moreover, Alacritech has repeatedly informed Intel
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`9
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`that unless it is a party to the case, Alacritech will not even reveal its infringement allegations
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`against Intel Ethernet components to Intel. [Stephens Decl. Ex. 2]
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`Finally, as discussed above, Intel has agreed to partially indemnify Dell. Given Intel’s
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`direct interest in the litigation and the potential impact on its business and customers, Intel
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`should be allowed to protect its interests first hand. Intel should not be required to stand back
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`and watch its fate litigated without a say in the outcome.
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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
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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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`10
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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 Dell incorporates Intel’s highly complex networking technology components into its own
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`products, it does not design or manufacture those components. As such, Intel is in a better
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`position to assert all applicable non-infringement defenses relevant to its technology. Id. at *4
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`(because a manufacturer “is uniquely situated to understand and defend its own product, its
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`interests are not adequately represented by existing parties to the litigation”).
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`In addition, Alacritech has improperly used the protective order to prevent Intel from
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`providing assistance to Dell in this case. Unless Intel intervenes, Alacritech’s improper tactics
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`will effectively prevent Intel from even assisting Dell in defending infringement contentions
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`based on Intel products.
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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. Because the cost of patent litigation is high and
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`often forces parties into settlement before the merits are fully addressed, a customer may not
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`have as great an interest as a manufacturer, such as Intel, in fully litigating the case to obtain
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`findings of non-infringement. Intervention as of right should be granted to one who may
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`potentially present a “more vigorous presentation” of its interests than the existing parties. N.Y.
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`Pub. Interest Research Group, Inc. v. Regents of Univ. of State of N.Y., 516 F.2d 350, 352 (2d
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`Cir. 1975).
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`11
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