Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 1 of 8 PageID #: 3719
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`GESTURE TECHNOLOGY
`PARTNERS, LLC,
`
`Plaintiff
`
`v.
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`HUAWEI DEVICE CO., LTD.,
`HUAWEI DEVICE USA, INC.,
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`Defendants.
`
`GESTURE TECHNOLOGY
`PARTNERS, LLC,
`
`Plaintiff
`
`v.
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`SAMSUNG ELECTRONICS CO., LTD.
`AND SAMSUNG ELECTRONICS
`AMERICA, INC.,
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`Defendants.
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`§
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`CASE NO. 2:21-cv-00040-JRG
`(Lead Case)
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`JURY TRIAL DEMANDED
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`CASE NO. 2:21-cv-00041-JRG
`(Member Case)
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`JURY TRIAL DEMANDED
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`SAMSUNG DEFENDANTS’ REPLY IN SUPPORT OF THEIR MOTION TO COMPEL
`PRODUCTION OF RESPONSIVE DOCUMENTS
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 2 of 8 PageID #: 3720
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`Samsung1 limits this Reply to the issue of its request for documents and communications
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`("Negotiation Documents") relating to Dr. P1yor 's attempts to license the '-
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`Po1tfolio,"
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`which included the four Asse1ted Patents in this case. Samsung seeks Negotiation Documents
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`stemming from letters Dr. P1yor sent to other companies similarly situated to Samsung to initiate
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`license negotiations:
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`2 These Negotiation Documents will provide relevant evidence of the "underlying
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`value" of the Asse1ted Patents. Charles E. Hill & Assocs., Inc. v. ABT Elecs., Inc., 854 F. Supp.
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`2d 427, 429- 30 (E.D. Tex. 2012). Fmt her, these Negotiation Documents will reflect what GTP 's
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`damages expe1t calls "aim' s length transaction[ s ]" between Dr. P1yor and potential licensees, and
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`therefore provide paiticularly relevant evidence for the Hypothetical Negotiation. GTP should be
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`compelled to make a complete production of Negotiation Documents relating to any attempts to
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`license the Asse1ted Patents and/or to provide a declaration stating that GTP (including its principal
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`Dr. P1yor) has produced all such Negotiation Documents.
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`I.
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`NEGOTIATION DOCUMENTS REGARDING PATENT LICENSES ARE NOT
`"PRESUMPTIVELY PRIVILEGED"
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`Documents and communications regarding negotiation of potential patent licenses are not
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`"presumptively privileged," as GTP claims. Compare Dkt. 113 ("Opp.") at 3 with Charles E. Hill,
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`854 F. Supp. 2d at 429 (taking a "case-by-case approach" to discoverability). GTP misstates the
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`applicable law and should not be pe1mitted to hide behind its blaIIket asse1t ion of privilege.
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`GTP's misunderstanding appeai·s to be reflective of a broader confusion smTounding the
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`discoverability of license negotiations. Since 2004, comts in the Eastern District of Texas have
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`1 Samsung and co-defendants Huawei Device Co., Ltd. and Huawei Device USA, Inc. ("Huawei")
`filed the present Motion to Compel on October 15, 2021. On October 19, 2021, GTP and Huawei
`filed a Notice of Paitial Settlement. Dkt. 101. In light of the Paitial Settlement, Samsung files
`this Reply without the Huawei Defendants.
`2 It is unclear whether Dr. P1yor sent a similar letter to other companies, as well.
`
`-1-
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 3 of 8 PageID #: 3721
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`cited a Sixth Circuit decision as authority for the discoverability of negotiation documents. See
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`Intergraph Hardware v. Dell, No. 2:02-cv-00312-TJW, Dkt. 348 (E.D. Tex. Jun. 3, 2004) (relying
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`on Goodyear Tire v. Chiles Power, 332 F.3d 967 (6th Cir. 2003)); Tyco Healthcare v. E-Z-EM,
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`No. 2:07-cv-262-TJW, 2010 WL774878, at *2 (E.D. Tex. Mar. 2, 2010) (citing Intergraph
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`Hardware); Mondis Tech. v. LG Elecs. , No. 2:07-cv-565-TJW, 2011 WL 1714304, at *5 (E.D.
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`Tex. May 4, 2011) (citing Tyco); SOL IP v. AT&T, No. 2: 18-cv-00526-RWS-RSP, 2020 WL
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`60140, at *3 (E.D. Tex. Jan. 6, 2020) (citing Mondis). But the discoverability of Negotiation
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`Documents is an issue of substantive patent law. In re MSTG, Inc. , 675 F.3d 1337, 1341-42 (Fed.
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`Cir. 2012). Consequently, Federal Circuit law-not Sixth Circuit law- governs. Goodyear Tire
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`is not contrnlling on the question of whether the Negotiation Documents are discoverable.
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`The Federal Circuit addressed this as a matter of first impression in 2012, and found that
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`"settlement negotiations related to reasonable royalties and damage calculations are not protected
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`by a settlement negotiation privilege." In re MSTG, 675 F.3d at 1348. The Comi held that Federal
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`Rule of Evidence 408 does not protect settlement negotiations from discove1y, id. , and a district
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`comi's proper use of discretion to limit discove1y of such negotiations satisfies Congress 's public
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`policy goal of protecting confidential communications. Id. at 1347. It follows that GTP's reliance
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`on SOL IP is misplaced.3 There is no bright-line rnle that "offers and negotiations that have not
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`resulted in an executed license or agreement are not discoverable." Opp. at 3.
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`3 Even if the Comi finds SOL IP applicable, the concerns raised by the Magistrate Judge Payne in
`that case do not apply to the present Motion. There, the Comi denied discove1y for "ongoing or
`unconsummated" licensing negotiations because discove1y of the negotiation documents (1) would
`be unreliable, and (2) Inight have had "a chilling effect on ongoing settlement negotiations." 2020
`WL 60140, at *3 ( citation oinitted). Setting aside whether a document's alleged unreliability is an
`appropriate consideration for its discoverability, there is no "chilling effect on ongoing settlement
`negotiations" in the present case. The Negotiation Documents that Samsung seeks are not related
`to ongoing negotiations, but rather relate to past licensing effo1is in 2016-2018.
`
`-2-
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 4 of 8 PageID #: 3722
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`II.
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`NEGOTIATION DOCUMENTS REGARDING THE
`FALL WITIDN THE SCOPE OF DISCOVERY
`As this Comi properly noted in Charles E. Hill, discoverability of Negotiation Documents
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`PORTFOLIO
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`requires a "case-by-case approach" and depends in paii on whether negotiations "are an accurate
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`reflection of the patents ' underlying value." 854 F. Supp. 2d at 429. Negotiation Documents that
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`provide an "accurate reflection of the patents' underlying value" fall within the proper scope of
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`discove1y in this case. Fed. R. Civ. P. 26(b). Here, Negotiation Documents that Samsung seeks
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`will provide an "accurate reflection" of the Asse1ied Patents' underlying value. Even more, they
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`will likely provide the best evidence of a real-world, "aims-length" transaction. Lucent Techs. ,
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`Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). See also Ex. C (Expert Repo1i of Mr.
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`David Kennedy), ,r 248
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`P1yor entered into
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`than the documents and communications
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`Here, there is likely no better evidence of how Dr.
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`reflecting his licensing attempts with
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`III.
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`FAIRNESS REQUIRES PRODUCTION OF ALL NEGOTIATION DOCUMENTS
`REGARDING THE-PORTFOLIO
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`GTP's damages expe1i, Mr. David Kennedy, explicitly referenced and relied on aspects of
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`Dr. P1yor' s pmpo1ied licensing strategy in order to downplay the significance of the financial tenns
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`Dr. P1yor offered to potential licensees. For example, when discussing Factor 1 for his Georgia(cid:173)
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`Pacific Analysis, Mr. Kennedy attempted to explain why Dr. P1yor offer e d - a license to the
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`-
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`Po1ifolio (including all four Asserted Patents) f o r j u s t - n 2016, stating:
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`-3-
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 5 of 8 PageID #: 3723
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`Ex. C, ,, 223- 27 (emphasis added). None of the documents GTP produced to date, however,
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`evidence Mr. Kennedy's asse1tions. Additional Negotiation Documents with - may tend to
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`suppo1t or undermine these asse1tions.
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`Similarly, Mr. Kennedy made an effo1t to explain the amount Dr. P1yor might accept from
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`a willing licensee for a license to the-P01tfolio. Id. at,, 174-75 (describing Dr. P1yor 's
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`strategy to
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`Additional
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`Negotiation Documents between Dr. P1yor and
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`may tend to support or undermine these asse1tions. Without additional Negotiation Documents,
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`however, it remains unclear whether Dr. P1yor viewed any of these fom companies as a potential
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`and if so, which qualities or characteristics might apply similarly to
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`Samsung in the context of the Hypothetical Negotiation. GTP cannot rely on back-channel talks
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`with Dr. Piyor about license negotiations and at the same time flatly refuse to provide discove1y
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`on those same negotiations. See In re MSTG, 675 F.3d at 1348.
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`Moreover, GTP has waived any argument that it need not produce Negotiation Documents
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`relating to the-P01t folio. GTP has ah-eady produced a number of Negotiation Documents
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`and presented Dr. P1yor to testify about them as GTP's Rule 30(b)(6) witness; GTP cannot now
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`claim privilege as the basis for not providing fmther discove1y on the same subject matter. GTP
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`also cannot selectively produce an email here and an email there but refuse to produce the rest of
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`the sto1y . Fairness (in addition to GTP's legal obligation) requires that GTP provide a full record
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`with respect to license negotiations relating to the Asse1ted Patents.
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`IV. GTP'S RECENT DOCUMENT PRODUCTIONS ARE INSUFFICIENT TO CURE
`THE ONGOING PREJUDICE TO SAMSUNG
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`GTP continues to asse1t alleged "settlement privilege" while trickling out an incomplete
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`record of Dr. P1yor 's license negotiations as to the -
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`Po1tfolio, and its recent document
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`-4-
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 6 of 8 PageID #: 3724
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`productions do not cure the prejudice Samsung continues to face as a result of GTP’s selective
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`omissions. See Opp. at 3-4; Dkt. 100 (“Mot.”) at 3. GTP has a legal obligation to produce these
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`documents and communications. Cf. Opp. at 4 (suggesting that Samsung should have obtained
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`the Negotiation Documents from the third parties Dr. Pryor negotiated with).
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`GTP’s improper assertion of alleged “settlement privilege” has the effect of unilaterally
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`narrowing the scope of Samsung’s request for Negotiation Documents. Samsung’s September 1,
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`2021 letter to GTP requested, in part, “[a]ll documents relating in any way to any license or attempt
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`to license the Patents-in-Suit.” Mot. at 1 (Ex. A at 4). While Samsung knows of five companies
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`to which Dr. Pryor sought to license the
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` Portfolio, Samsung remains in the dark about
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`-
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`-
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`other companies to which Dr. Pryor may have sent similar licensing letters. GTP’s admission that
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`it cannot locate a 2012 licensing communication between Dr. Pryor’s counsel and
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` masks
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`the potential severity of its discovery omissions. Mot. at 3–4 (“The above are but a few examples
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`of GTP’s failure to abide by its discovery obligations.”) (emphasis added). The Court should
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`require GTP to produce all Negotiation Documents as Samsung requested.
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`V.
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`CONCLUSION
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`For the foregoing reasons, Samsung respectfully requests that the Court grant its Motion
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`and compel GTP’s complete production of documents and communications relating to attempts to
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`license the Asserted Patents. Alternatively, or in addition, Samsung respectfully requests that the
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`Court compel GTP to provide a declaration stating that GTP (including its principal Dr. Pryor) has
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`produced all such documents and communications.
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`-5-
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`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 7 of 8 PageID #: 3725
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`DATED: November 10, 2021
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`Respectfully submitted,
`
`By: Isl Christopher W. Kennerlv
`Christopher W . Kennerly (TX Bar No. 00795077)
`chriskennerly@paulhas tings.com
`Radhesh Devendran (pro hac vice)
`radheshdevendran@paulhastings.com
`Boris S. Lubarsky (pro hac vice)
`borislubarsky@paulhastings.com
`David M . Fox (pro hac vice)
`davidfox@paulhastings.com
`PAUL HASTINGS LLP
`1117 S. California A venue
`Palo Alto, CA 94304
`Telephone: (650) 320-1800
`Facsimile: (650) 320-1 900
`
`Allan M . Soobert
`allansoobe1t@paulhastings.com
`PAUL HASTINGS LLP
`2050 M Street NW
`Washington, D.C. 20036
`Telephone: 202-551-1 700
`Facsimile: 202-551 -1 705
`
`Elizabeth L. Brann
`elizabethbrann@paulhastings.com
`PAUL HASTINGS LLP
`4747 Executive Drive, 12th Floor
`San Diego, CA 92121
`Telephone: (858) 458-3000
`Facsimile: (858) 458-3005
`
`Robe1t Laurenzi
`robe1tlaurenzi@paulhastings.com
`PAUL HASTINGS LLP
`200 Park A venue
`New York, NY 10166
`Telephone: (212) 318-6000
`Facsimile: (212) 319-4090
`
`Melissa R. Smith (TX Bar No. 24001351)
`GILLAM & SMITH, LLP
`303 S . Washington Ave.
`Marshall, TX 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`
`-6-
`
`

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`Case 2:21-cv-00040-JRG Document 124 Filed 11/12/21 Page 8 of 8 PageID #: 3726
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`melissa@gillamsmithlaw.com
`
`Attorneys for Defendants Samsung Electronics
`Co., Ltd and Samsung Electronics America, Inc.
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`CERTIFICATE OF AUTHORIZATION TO SEAL
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`I hereby ce1iify that under Local Rule CV-5(a)(7), the foregoing document is filed under
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`seal pursuant to the Comi 's Protective Order entered in this matter.
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`Isl Christopher W. Kennerlv
`Christopher W. Kennerly
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`CERTIFICATE OF SERVICE
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`I hereby ce1iify that a trne and conect copy of the foregoing document was filed
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`electronically in compliance with Local Rule CV-5 on November 10, 2021. As of this date, all
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`counsel of record had consented to electronic service and are being served with a copy of this
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`document through the Comi 's CM/ECF system under Local Rule CV-5(a)(3)(A) and by email.
`
`Isl Christopher W. Kennerlv
`Christopher W. Kennerly
`
`-7-
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`