Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 1 of 10 PageID #: 6890
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`Plaintiff,
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`v.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`INTEL CORPORATION’S REPLY IN SUPPORT OF ITS
`MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS
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`Case No. 2:17-cv-00676-RWS-RSP
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`JURY TRIAL DEMANDED
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`GODO KAISHA IPB 1,
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`INTEL CORPORATION,
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`Defendant.
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 2 of 10 PageID #: 6891
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`I.
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`THE RECORD DEMONSTRATES INTEL’S DILIGENCE.
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`IP Bridge (“IPB”) criticizes Intel for supplementing its contentions with Intel prior art, but
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`IPB cannot deny that many years have passed since the prior art products were produced, or the
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`extensive efforts that Intel undertook to discover and confirm that they invalidate the asserted
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`claims, facts that Intel immediately disclosed to IPB. Intel’s diligent efforts are detailed in a day-
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`by-day description in the timelines supporting Intel’s Opening Brief, which IPB’s arguments
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`ignore in important respects. See Dkt. No. 113-1 (“Carter Decl.”) at ¶ 7. Contrary to IPB’s
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`assertions, Intel began searching for relevant prior art immediately after IPB filed this case; it did
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`not delay.1 See Carter Suppl. Decl. at ¶ 9. Before receiving IPB’s infringement contentions—and
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`before knowing what claims would be asserted, let alone IPB’s infringement theories—Intel’s
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`counsel interviewed engineers to locate product art. Id.; see also Carter Decl. at ¶ 7. Since most
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`engineers did not know whether specific claim elements were present in Intel’s products, Intel had
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`to follow up on leads from one engineer to the next, until information was eventually discovered.
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`See id. At the same time, Intel sought to identify the products made using each process node, 2
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`and along with attempting to collect information from sources at Intel, promptly sought reverse
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`engineering of those products. Intel’s investigation continued uninterrupted until July 20th, when
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`Intel served the supplemental invalidity contentions at issue. See id.; Dkt. No. 113-6 (Tomkins
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`1
`IPB contends that Intel was obligated to search for prior art before this suit was filed but cites no supporting
`authority. Courts in other districts have held that the assessment of diligence focuses on the time when
`discovery is open. See, e.g., Digital Ally, Inc. v. Taser Int'l, Inc., No. 16-CV-2032-CM-TJJ, 2018 WL 1138283,
`at *6 (D. Kan. Mar. 2, 2018); Netflix, Inc. v. Rovi Corp., No. 11-CV-06591-PJH-DMR, 2015 WL 3504969, at
`*4 (N.D. Cal. June 2, 2015). This makes sense because a plaintiff may shift theories, as IPB did between the
`2015 presentations and its January 2018 infringement contentions. See e.g., Dkt. No. 125-6 at 12 and Ex. 5
`(Appx. 3.2 Preliminary Infringement Contentions of U.S. Patent No. 7,279,727).
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`2 Contrary to IPB’s assertion, Intel does not attempt to excuse alleged delays based on an inability to procure the
`chips. See Opp. at 9. The difficulty for Intel was identifying which prior-art products were manufactured using
`each node. It took multiple engineer interviews and extensive review of financial documentation to determine
`the relevant products. See Carter Decl. at ¶ 7. The Google search that IPB completed was likely much easier
`since IPB already knew the relevant products.
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`1
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 3 of 10 PageID #: 6892
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`Decl.) at ¶¶ 18-62. During that span, Intel repeatedly provided updates to IPB—through
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`supplemental contentions on April 25th (at IPB’s request), correspondence on May 31st,3 and a
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`call on July 12th. There were no “inexcusab[le]” or “reckless[]” delays in Intel’s investigation,
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`and IPB’s contrary assertions are based on fundamental misunderstandings of the record.
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`P648/P650: IPB does not dispute that Intel sufficiently disclosed the P648/P650 process
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`nodes in its original contentions on February 22nd, mapping those nodes to the asserted claims.
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`Opp. at 4-5. Nor does IPB dispute that Intel diligently identified the 486DX2 processor in its
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`supplemental charts on April 25. Id. at 9.4 Rather, IPB narrowly focuses on Intel’s diligence in
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`the one-month period between its supplemental contentions identifying the 486DX2 processor (in
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`April) and ICmasters’ analysis (in May). Even then, IPB ignores the actual record of Intel’s
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`diligence during that time period: Intel searched its internal databases for information relating to
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`P648/P650 process nodes and the Intel 486DX2 product, (Mot. at 5; Carter Decl. at ¶¶ 5, 7B), but
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`the product’s age prevented Intel from uncovering additional documentation, requiring Intel to
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`immediately request assistance from TechInsights (and then ICmasters) on an expedited basis.
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`Carter Suppl. Decl. at ¶ 12; Mot. at 4-5. Intel worked with ICmasters continuously until obtaining
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`reverse engineering results on July 11 for the 486DX2, which Intel promptly added as
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`supplemental evidence to its P648/P650 charts. See Carter Decl. at ¶ 7.B.
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`3
`IPB does not dispute that Intel’s May 31st letter provided notice of intent to supplement based on the process
`nodes and products discussed herein. Yet IPB complains that Intel did not specifically mention reverse
`engineering. IPB provides no authority for the suggestion that Intel was required to divulge the details of its
`ongoing investigation, but in any event, Intel had already identified the relevant process nodes and products to
`IPB, and Intel provided supplemental invalidity claim charts as soon as possible thereafter. Dkt. No. 113-4.
`And unlike the defendant in MacroSolve, Inc. v. Antenna Software, Inc., No. 6:11-CV-287-MHS-JDL, 2013
`WL 3833079, at *4 (E.D. Tex. July 23, 2013), Intel has fully “account[ed] for its activity during the period
`between filing its original invalidity contentions and the [motion to supplement].”
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`4 Contrary to IPB’s claims, it did not object to Intel’s addition of its 486DX2 product in the April 25 contentions
`as an exemplary processor fabricated according to the P648/650 node in the April supplement. See Ex. 6 (May
`11, 2018 A. Radsch Email to C. Lawless).
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`2
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 4 of 10 PageID #: 6893
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`P860: IPB concedes that Intel sufficiently disclosed the P860 process node in its February
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`22nd contentions. Opp. at 1, 4. IPB also admits that Intel’s “P860 charts referenced actual products
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`allegedly made in those nodes.” Id. at 4. IPB’s narrow attempt to show insufficient diligence
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`focuses on the one-month period (April-May 2018) after Intel discovered the Pentium 4S
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`Northwood product, and before it authorized ICmasters to purchase samples. See id. at 9-10.
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`During that time, Intel was diligently searching internally for preexisting P860 product reports and
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`financial records to confirm first-sale dates of specific products, including Pentium 4S Northwood.
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`Carter Suppl. Decl. at ¶ 13; see also Carter Decl. at ¶ 7.C. Furthermore, an unforeseeable conflict
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`with a subcontractor arose which, contrary to IPB’s speculation (Opp. at 11), prevented ICmasters
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`from doing any further work on this case until May 11th. See Carter Decl. at ¶ 7.C; Dkt. No. 113-
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`6 at ¶¶ 10-12. On May 23, Intel was able to identify and commence analysis on specific products
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`made using the P860 process node for which first sale could be verified. See Carter Decl. at ¶ 7.C.
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`IPB does not dispute that Intel promptly disclosed those products to IPB in its May 31st letter.
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`Opp. at 5. After obtaining reverse engineering results on July 10th, Intel promptly supplemented
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`its contentions ten days later.
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`P1262: IPB does not dispute that Intel disclosed both the P1262 process node and the
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`Pentium 4 Prescott processor in its original February 22nd contentions. Id. at 1, 4, and 9. IPB’s
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`argument instead focuses on the period between Intel’s February contentions and ICmasters’
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`purchase of Prescott processors in May. Id. at 9. During this period, Intel diligently searched
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`internally for more preexisting P1262 product reports and financial records to confirm first sale of
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`specific P1262 products. Carter Suppl. Decl. at ¶ 14; see also Carter Decl. at ¶ 7.D. Intel also
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`worked with ICmasters to identify obtainable samples of embodying prior-art products for which
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`first sale could also be verified. ICmasters’ assistance was delayed until mid-May due to the sub-
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`3
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 5 of 10 PageID #: 6894
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`contractor conflict discussed above. Id. After obtaining reverse engineering results on July 10th,
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`Intel promptly supplemented its contentions ten days later.
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`P854: This process node took longer to uncover than the others because of even greater
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`difficulty in locating individuals with knowledge of the process node and the products
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`manufactured using it. IPB’s assertion that Intel “did not bother to contact a reverse engineering
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`firm . . . until the day its invalidity contentions were due” ignores when Intel first learned of P854’s
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`relevance to this case. Despite conducting nine engineer interviews over the six-week period from
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`December 27 until February 6 (which could not have been conducted in parallel, since one
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`interview led to the next), it was not until February 12th—just ten days before invalidity
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`contentions were due—that Intel first became aware of the technical details of P854. Carter Suppl.
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`Decl. at ¶ 10. In the days that followed, Intel diligently searched for the few documents available
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`for P854 and made them available to IPB on February 22nd. Carter Decl. at ¶ 7.A. Intel first
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`contacted TechInsights about the P854 that same day. Id. After TechInsights declined the work,
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`Intel promptly contacted ICmasters, who immediately procured chips for analysis. See Dkt. No.
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`113-6. at ¶¶ 4-7.
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`IPB further faults Intel’s diligence in the period between first contact with ICmasters on
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`March 1st and requesting analysis of the P854 on April 23rd. But during that time, Intel serially
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`completed seven more engineer
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`interviews and analyzed additional, newly-identified
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`documentation5 in an effort to prepare contentions without reverse engineering. See Carter Decl.
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`at ¶ 7A; Carter Suppl. Decl. at ¶ 11. Immediately upon realizing that reverse engineering was
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`necessary, Intel requested that ICmasters complete its work on an expedited basis. Id.; see also
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`5
`IP Bridge points out that the records reviewed were financial rather than technical (Opp. at 11), but this review
`was necessary in order to identify which specific products were made with a given process node and sold before
`the relevant priority date.
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`4
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 6 of 10 PageID #: 6895
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`Dkt. No. 113-6 at ¶ 8. ICmasters’ assistance was delayed until the mid-May due to the sub-
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`contractor conflict discussed above. See Carter Decl. at ¶ 7A; Dkt. No. 113-6 at ¶¶ 10-12. Further
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`delay resulted when ICmasters discovered on May 17 that the procured chips were fabricated using
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`the wrong process; ICmasters did not receive the correct chips until May 31st, when reverse
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`engineering immediately resumed until completion on July 10th.6 See Dkt. No. 113-6 at ¶¶ 17-27,
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`29, 32-34, 36, 38-44, 46-49, 51, 57, 59-61.
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`II.
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`INTEL’S CONTENTIONS DO NOT ADD ART OR NEW THEORIES.
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`IPB contends, with little support, that Intel has changed its arguments. Opp. at 13-14. As
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`discussed below, the alleged differences set forth in the Palmieri declaration are incorrect.
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`P1262, P860, and P648/P650: IPB relies on cherry-picked examples to mischaracterize
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`Intel’s supplemental evidence as “new prior art and new invalidity grounds.” Id. at 4. But IPB
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`does not dispute that Intel’s “charts referenced actual products.” Id. at 4, 9. IPB has stated that
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`“once one of Intel’s . . . processes is developed at one facility, it is replicated exactly at each other
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`applicable manufacturing site” and “the asserted patents are directed to those processes, or to
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`features of products determined by those processes.” See Ex. 7 (May 8, 2018 Radsch Letter to
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`Lawless). IPB cannot argue that products are representative of a process node in the infringement
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`context, then turn around and claim that additional evidence of a product fabricated using a given
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`process node amounts to a “new theory” in the validity context. Additionally, each IPB example
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`of an allegedly “new” theory is incorrect. See Carter Suppl. Decl. ¶¶ 2-8 (addressing Palmieri
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`declaration and confirming that prior-art products support invalidity positions identical to those
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`6
`IPB cites Invensys Sys., Inc. v. Emerson Elec. Co., No. 6:12-CV-799, 2014 WL 12598865, at *3 (E.D. Tex.
`Dec. 3, 2014), where the court found a lack of diligence because defendants possessed the information from the
`filing date of the case. Here, Intel timely disclosed all relevant materials in its possession at each step in the
`investigation, and its supplements are based on reverse engineering analyses that Intel did not have in its
`possession until shortly before it sought leave to supplement. Mot. at 10-12; Carter Decl. at ¶7.
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`5
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 7 of 10 PageID #: 6896
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`previously disclosed). IPB has been aware of Intel’s specific contentions for each node and
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`corresponding products since Intel’s February and April contentions, and Intel’s supplemental
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`evidence does not amount to new invalidity grounds. Evicam Int'l, Inc. v. Enf't Video, LLC, No.
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`4:16-CV-00105, 2016 WL 6600605, at *3 (E.D. Tex. Nov. 8, 2016) (granting request to
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`supplement contentions where party previously disclosed prior art references for another patent).
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`P854: IPB argues that Intel’s original contentions “did not disclose that Intel would be
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`relying on any P854 process node products.” Opp. at 2-3. Yet IPB admits that P854 was expressly
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`identified in claim charts that accompanied Intel’s contentions (id.), which cited to all P854-related
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`documentation that was available.7 IPB then shifts its focus, asserting that “Intel did not reference
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`any specific products or part numbers” in its original contentions, “including the A80502-133.”
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`Id. at 3. But Intel did not become aware of A80502-133 until after serving its original contentions,
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`despite multiple interviews attempting to do so. See Dkt. No. 113-6 at ¶ 18; Carter Decl. at ¶ 7A.
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`III. THERE IS NO PREJUDICE TO IPB.
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`IPB’s claims of prejudice are also unfounded. Intel, not IPB, would be greatly prejudiced
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`if it is not allowed to present its own prior art products as part of its invalidity case. See Mot. at
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`13. IPB has plenty of time to analyze the prior-art chips and depose the few engineers
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`knowledgeable about the process nodes.8 First, there are seven weeks left in fact discovery, and
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`7
`IPB also points to Intel’s removal of citations to P854 from April 25th supplemental contentions and asserts that
`act “indicat[ed] that Intel no longer intended to rely on that process node (or products made in it) at all.” Opp.
`at 4. Intel’s April 25th contentions are not at issue in this motion, but in any event, IPB’s incorrect assumption
`regarding Intel’s intent does not speak to whether Intel previously disclosed P854, and any confusion on IPB’s
`part—which was never raised with Intel—was resolved by Intel’s May 31st letter, which notified IP Bridge of
`Intel’s intent to supplement with the P854 process node and the A80502-133 Pentium made with that node.
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`IPB suggests that it would need to depose “42 current and former Intel engineers” to analyze this prior art. Not
`so. Intel did not speak to former employees in connection with its investigation, and most of the current
`engineers whom Intel interviewed were not knowledgeable about the decades-old process nodes—that was one
`reason the investigation took the time it did. Intel has identified the most knowledgeable engineers to IPB, and
`their depositions are already scheduled to occur in the coming weeks. See Ex. 8 (August 12, 2018 Email C.
`Lawless to S. Taylor).
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 8 of 10 PageID #: 6897
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`another 3.5 weeks after that before IPB is required to submit expert reports on patent validity. IPB
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`acknowledges that Intel completed its reverse engineering in only six weeks (see Opp. at 12), and
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`although IPB has not explained why further reverse engineering is necessary, it could be
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`accomplished in substantially less time now that IPB has Intel’s disclosures and knows the
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`structures on which to focus. IPB has known about the prior-art products for months (See Dkt. No.
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`113-4 (May 31 letter); Ex. 9 (April 25 Infringement Contentions) and should not be allowed to
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`benefit so substantially by delaying its own analysis until it is too late. Fact witness depositions
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`unrelated to the transfer motions began only last week, and IPB’s expert will not opine on validity
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`until October 23rd.
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`Second, with respect to claim construction, as discussed above, none of the supplements
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`change any of the previously disclosed invalidity theories. And IPB has not explained with any
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`specificity how Intel’s supplement would allegedly affect claim construction, including the one
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`proposed construction currently pending before the Court that relates to a patent at issue in this
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`motion (i.e., the ’736 patent).
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`Third, Intel has not prevented IPB from inspecting the prior-art products. IPB even
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`acknowledges Intel’s offer to send samples to a lab of IPB’s choosing for analysis. See Opp. at 6.
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`Finally, Intel timely produced all relevant documents it has found in its possession,
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`including layout files and process flows that were made available as early as February 22, 2018.
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`IPB complains about unproduced process recipes (which IPB did not request until August 6th),
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`but Intel has not located any such recipes after conducting a reasonable search.
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`7
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 9 of 10 PageID #: 6898
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`DATED: August 21, 2018
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`Respectfully submitted,
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`/s/ Gregory S. Arovas with permission,
`by Michael E. Jones
`Michael E. Jones (SBN: 10929400)
`Patrick C. Clutter (SBN: 2403634)
`POTTER MINTON, PC
`110 North College, Suite 500
`Tyler, Texas 75702
`Tel: (903) 597-8311
`Fax: (903) 593-0846
`mikejones@potterminton.com
`patrickclutter@potterminton.com
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`Gregory S. Arovas (pro hac vice filed)
`Jon R. Carter (pro hac vice filed)
`KIRKLAND & ELLIS LLP
`601 Lexington Ave.
`New York, NY 10022
`Tel: 212-446-4800
`Fax: 212-446-4900
`gregory.arovas@kirkland.com
`jon.carter@kirkland.com
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`Adam Alper (pro hac vice filed)
`Sarah E. Piepmeier (pro hac vice filed)
`KIRKLAND & ELLIS LLP
`555 California Street
`San Francisco, CA 94194
`Tel: (415) 439-1400
`Fax: (415) 439-1500
`adam.alper@kirkland.com
`sarah.piepmeier@kirkland.com
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`Michael W. De Vries
`Christopher M. Lawless (pro hac vice filed)
`KIRKLAND & ELLIS LLP
`333 S. Hope Street
`Los Angeles, CA 90071
`Tel: (213) 680-8400
`Fax: (213) 680-8500
`michael.devries@kirkland.com
`christopher.lawless@kirkland.com
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`Attorneys for Defendant Intel Corporation
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`Case 2:17-cv-00676-RWS-RSP Document 129 Filed 08/21/18 Page 10 of 10 PageID #: 6899
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that all counsel of record who have consented to electronic
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`service are being served with a copy of this document via the Court’s CM/ECF system per Local
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`Rule CV-5(a)(3) on this 21st day of August 2018.
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`/s/ Michael E. Jones
`Michael E. Jones
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