Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 1 of 9 PageID #: 6084
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`CYWEE GROUP LTD.,
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`Plaintiff
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`v.
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`SAMSUNG ELECTRONICS CO., LTD.
`AND SAMSUNG ELECTRONICS
`AMERICA, INC.,
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`Defendants.
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`NO. 2:17-CV-00140-WCB-RSP
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`SAMSUNG ELECTRONICS CO., LTD. AND SAMSUNG ELECTRONICS
`AMERICA, INC.’S OPPOSITION TO PLAINTIFF’S SECOND
`MOTION TO COMPEL
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 2 of 9 PageID #: 6085
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`CyWee’s second motion to compel follows the same pattern as its first. Rather than properly
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`meeting and conferring on the issues, CyWee’s counsel followed up multiple harassing e-mails with a
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`premature and baseless motion before Samsung Electronics Co., Ltd. and Samsung Electronics
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`America, Inc. (collectively, “Samsung”) had time to consider CyWee’s ever-changing discovery
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`demands. CyWee’s motion appears intended solely to waste the resources of the Court and the
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`parties.
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`Of the four issues CyWee raises in its second motion, two are now moot or will soon be
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`moot. Indeed, two are identical to issues CyWee already raised in its first motion. CyWee’s only
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`remaining two demands are inappropriate, and CyWee’s motion should be denied.
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`I.
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`ARGUMENT
`A.
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`Samsung produced the requested SEC and SEA financials on Thursday,
`August 2
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`During a meet and confer, Samsung informed CyWee that it would produce updated SEA
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`financials and SEC financials by August 2, 2018. Declaration of Christopher W. Kennerly
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`(“Kennerly Decl.”) ¶ 2. Samsung reiterated this the next day when it filed its opposition to CyWee’s
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`first motion to compel. Dkt. No. 129 at 1–3. As promised, Samsung produced the requested
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`financial information on August 2, 2018. CyWee’s representation that Samsung did anything
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`otherwise is a complete fabrication. Like its first motion to compel on this exact same issue,
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`CyWee’s second motion is moot and should be denied.
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`B.
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`Samsung has already agreed to produce a material cost file for each accused
`product model and provide a declaration authenticating these files
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`Contrary to CyWee’s misrepresentations, Samsung provided CyWee with all of the cost
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`information relevant to this case before CyWee had taken even a single deposition. Prior to the
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`30(b)(6) deposition, CyWee had only requested the bills of materials for each Accused Product and
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`documents sufficient to show the cost of the motion sensors (including accelerometers, gyroscopes,
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`-1-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 3 of 9 PageID #: 6086
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`and magnetometers). Kennerly Decl. ¶ 3, Ex. 1.1 Samsung produced its bills of materials in
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`productions on September 15, 2017 and March 23, 2018. Kennerly Decl. ¶ 4. On September 15,
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`2017, Samsung provided SEA’s financials detailing costs for the accused products in the U.S. from
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`the second quarter of 2013 to the third quarter of 2017. Kennerly Decl. ¶ 5. On the same day,
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`Samsung provided CyWee with the costs of specific components. Id. ¶ 6. Samsung provided an
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`updated version on March 23, 2018 containing the cost of every component relevant to the accused
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`sensor fusion features in this case (e.g., gyroscope, accelerometer, magnetometer, and algorithm
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`processing chip). Id. ¶ 7. On the same day Samsung provided CyWee with spreadsheets correlating
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`the relevant components with each accused product. Id. ¶ 8. Given what CyWee had requested,
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`Samsung believed its production to be complete.
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`Over four months later, on July 27, 2018, CyWee took the deposition of Samsung’s 30(b)(6)
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`witness, DangWon Kim, on the budget for implementing the accused sensor fusion features and
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`Samsung’s bills of materials. Id. ¶ 9. CyWee appeared to be unaware during the deposition that the
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`costs for the relevant components had already been produced. Instead, CyWee tried to create an
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`unnecessary discovery dispute by accusing Samsung of not producing material cost files outlining
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`the costs for every single component in the accused products, an issue CyWee had never raised prior
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`to this date. Ex. 2 at 92:9–96:14, 134:17–136:10.
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`On July 28, 2018 (Korea Standard Time), CyWee requested for the first time that Samsung
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`produce the material cost files. Ex. 3. On July 29, 2018 (Korea Standard Time), Samsung responded
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`that it had produced the material costs for the relevant components months ago and Samsung’s
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`witness had been fully prepared to discuss these costs. Ex. 4. CyWee’s counsel all but confirmed that
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`it had been unaware of the cost data Samsung produced. Ex. 5.
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`1 Unless otherwise stated, all documents referenced herein are attached to the Declaration of
`Christopher W. Kennerly, filed concurrently herewith.
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`-2-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 4 of 9 PageID #: 6087
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`CyWee demanded once again during a July 31, 2018 meet and confer that Samsung provide
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`it with SEC’s material cost files, alleging for the first time that it needed these files for its damages
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`case. Kennerly Decl. ¶ 14 . Samsung represented that it would consider this issue. The following day,
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`CyWee filed its second motion to compel. Dkt. No. 130.
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`Despite the questionable relevance of the information requested, on August 3, 2018 (Korea
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`Standard Time), by e-mail and during an in-person meet and confer, Samsung stated that it would
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`agree to provide CyWee with one material cost file per accused product model and a declaration
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`authenticating the documents. Kennerly Decl. ¶ 15; Ex. 6.2
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`CyWee rejected Samsung’s proposal immediately, stating that it needed a witness to confirm
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`that the documents had not somehow been altered and “do not trust a declaration at this point.” Ex.
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`7. Despite CyWee’s refusal, Samsung is willing to provide a material cost file per accused product
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`and a declaration from a witness at Samsung authenticating these documents. Given that the parties
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`already agreed that Samsung witnesses would be deposed in Korea, however, it is not clear how
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`CyWee justifies demanding that Samsung bring a witness to Texas to be deposed on files that
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`CyWee did not request be produced until the close of discovery.
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`C.
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`SEA’s agreement with the IRS is not relevant to any issue in this case
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`As Samsung already stated in its opposition to CyWee’s first motion to compel, SEA’s
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`agreement with the IRS demonstrates only SEA’s efforts to comply with the tax laws and has
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`nothing to do with any issue relevant to this case. Dkt. No. 129 at 3. Accordingly, CyWee’s second
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`motion to compel on this point should be denied for the same reasons as its first motion to compel.3
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`2 Samsung also confirmed that it had produced a BOM for every accused product except the Galaxy
`Note 7 (which was recalled). Id. On the same day, Samsung produced updated SEA financials and
`SEC financial data including costs data. Kennerly Decl. ¶ 17.
`3 CyWee also alleges in its second motion that Samsung’s 30(b)(6) witness on U.S. sales and finances
`relating to the accused products, Sean Diaz, somehow admitted that the financial data Samsung
`produced was “misleading.” Dkt. No. 130 at 3. The record is clear on this point. Diaz represented
`multiple times that the financial information provided was based on U.S. sales. See, e.g., Ex. 8 at
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`-3-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 5 of 9 PageID #: 6088
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`D.
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`Samsung has already confirmed it has no documents indicating that the
`introduction of sensor fusion features into Samsung’s products was the result
`of the iPhone 4
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`On June 13, 2018, about six weeks before the close of discovery, CyWee served its second
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`set of interrogatories on Samsung. Interrogatory No. 39 requests that Samsung: “[i]dentify every
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`document in the possession of Samsung created or dated prior to the first sale of any Accused
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`Product that mentions, refers or relates to Apple products including, offering or incorporating
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`Sensor Fusion Technology.” Ex. 9 at 6. CyWee’s demand for every document in Samsung’s
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`possession that either referred or related to the Apple iPhone 4 was clearly not proportional to the
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`needs of this case, which relates to the infringement of a CyWee patent, not an Apple patent.
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`Accordingly, on July 13, 2018 Samsung responded requesting that the parties meet and confer
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`regarding the scope of CyWee’s interrogatory. Ex. 10 at 14. On July 16, 2018 CyWee accused
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`Samsung of “hiding its reaction to the iPhone 4.” Ex. 11.
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`On July 17, 2018 Samsung’s counsel met and conferred with CyWee’s counsel. Kennerly
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`Decl. ¶ 23. Based on this meet and confer and CyWee’s prior e-mails, Samsung understood that
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`CyWee was seeking documents regarding the decision to incorporate sensor fusion features into
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`Samsung’s products and whether this decision was a reaction to the iPhone 4. Id. In response, as set
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`forth in Samsung’s opposition to CyWee’s first motion to compel, Samsung provided CyWee
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`complete information relating to the decision to incorporate sensor fusion features into Samsung’s
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`products. Dkt. No. 129 at 3–5.
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`54:20–56:13, 57:9–25, 66:8–13, 73:17–74:12, 75:20–77:22, 151:20–152:14, 158:20–159:22, 163:8–15,
`176:18–178:5. This is merely another example (among many) of CyWee falsely mischaracterizing the
`testimony of one of Samsung’s witnesses.
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`-4-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 6 of 9 PageID #: 6089
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`CyWee’s demand that Samsung now produce every single document in its possession that
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`even tangentially refers to or relates to the iPhone 4, just so that CyWee can go on a fishing
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`expedition to prove its unsupportable theory, is entirely without merit. CyWee’s further citation to
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`the trial exhibits submitted in the Apple v. Samsung litigation, a completely unrelated case, is equally
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`unavailing. CyWee has presented no evidence that these documents even have anything to do with
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`sensor fusion.4
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`CyWee’s demands are puzzling given that Samsung notified CyWee in June that it would
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`produce a 30(b)(6) witness, Seongsig Kang, on the topic of the decision to add sensor fusion
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`features into Samsung’s products. Ex. 14. Despite being given over a month to prepare, CyWee
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`elected not to ask Mr. Kang even a single question regarding the decision to incorporate sensor
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`fusion features. Kennerly Decl. ¶ 27. CyWee cannot now complain that it was not afforded the
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`opportunity to obtain complete discovery on this point. Accordingly, CyWee’s motion to compel
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`should be denied.
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`E.
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`CyWee has consistently failed to meet and confer on the issues
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`At no point did CyWee ever properly meet and confer on the issues raised in its second
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`motion to compel. Instead, on July 29, 2018 (Korea Standard Time), while counsel for the parties
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`were in Seoul for depositions, CyWee sent no fewer than ten e-mails between 2:50 p.m. and 10:00
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`p.m. (some only a few minutes apart from each other) regarding the cost information. Exs. 15–24.
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`At approximately 5:30 a.m. the following day, CyWee’s lead counsel sent yet another e-mail. Ex. 25.
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`4 CyWee’s demand that Samsung produce every document in a completely unrelated case is further
`hypocritical given Samsung’s deposition of CyWee’s corporate witness, Zhou Ye. During this
`deposition, Samsung confirmed that CyWee had failed to provide Samsung with numerous
`documents in the CyWee v. Apple litigation, a case that involved the same patents. See, e.g., Ex. 13 at
`40:19–20.
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`-5-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 7 of 9 PageID #: 6090
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`In the early hours of the morning on July 31, 2018 Samsung’s lead counsel attempted to
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`meet and confer with CyWee’s counsel. The deposition of CyWee’s 30(b)(6) witness, Shun-Nan
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`Liou, had gone particularly late after CyWee had the witness read a scripted statement of questions
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`and answers as his “re-direct.” This recitation lasted for over an hour. Kennerly Decl. ¶ 39. A copy
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`of the purported “testimony” is attached. Ex. 26 at 219:17–245:18. As CyWee later admitted, parts
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`of the prepared statement were inconsistent with the witness’s actual testimony. Ex. 27.
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`In spite of being kept late for this improper, pre-fabricated statement, Samsung’s counsel
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`attempted to narrow the issues with CyWee’s counsel as required by the Court’s July 24 Order.
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`Samsung’s counsel represented during this conference that it was in the process of resolving many
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`of CyWee’s alleged concerns and would continue to try to work with CyWee on any new issues.
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`Kennerly Decl. ¶ 42. CyWee filed its second motion just over 24 hours later.
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`II.
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`CONCLUSION
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`CyWee appears determined to harass Samsung and try this case by discovery dispute. In
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`contrast, Samsung has made every effort to address CyWee’s discovery demands reasonably,
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`promptly, and in good faith. CyWee’s motions have resulted in a significant waste of time and effort
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`for both the Court and the parties, and its pattern of abusive discovery tactics cannot continue.
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`Samsung requests that the Court deny CyWee’s second motion to compel in its entirety.
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`-6-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 8 of 9 PageID #: 6091
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`DATED: August 6, 2018
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`Respectfully submitted,
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`By: /s/ Christopher W. Kennerly
`Christopher W. Kennerly
`TX Bar No. 00795077
`chriskennerly@paulhastings.com
`PAUL HASTINGS LLP
`1117 S. California Ave.
`Palo Alto, California 94304
`Telephone: (650) 320-1800
`Facsimile:
`(650) 320-1900
`
`Elizabeth L. Brann (pro hac vice)
`CA Bar No. 222873
`elizabethbrann@paulhastings.com
`Bob Chen (pro hac vice)
`CA Bar No. 273098
`bobchen@paulhastings.com
`PAUL HASTINGS LLP
`4747 Executive Drive, 12th Floor
`San Diego, California 92121
`Telephone: (858) 458-3000
`Facsimile:
`(858) 458-3005
`
`Melissa R. Smith
`TX Bar No. 24001351
`melissa@gillamsmithlaw.com
`GILLAM & SMITH, LLP
`303 S. Washington Ave.
`Marshall, TX 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
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`Attorneys for Defendants
`SAMSUNG ELECTRONICS CO. LTD AND
`SAMSUNG ELECTRONICS AMERICA, INC.
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`-7-
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`Case 2:17-cv-00140-WCB-RSP Document 142 Filed 08/08/18 Page 9 of 9 PageID #: 6092
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the foregoing document was filed
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`electronically in compliance with Local Rule CV-5 on August 6, 2018. As of this date, all counsel of
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`record had consented to electronic service and are being served with a copy of this document
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`through the Court’s CM/ECF system under Local Rule CV-5(a)(3)(A) and by email.
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` /s/ Christopher W. Kennerly
`Christopher W. Kennerly
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`CERTIFICATE OF AUTHORIZATION TO SEAL
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`I hereby certify that under Local Rule CV-5(a)(7), the foregoing document is filed under seal
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`pursuant to the Court’s Protective Order entered in this matter.
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` /s/ Christopher W. Kennerly
`Christopher W. Kennerly
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`-8-
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