Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 1 of 11 PageID #: 9755
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL, LTD.,
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`Plaintiff
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`Civil Action NO. 5:19-cv-00036-RWS
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`v.
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`APPLE INC.,
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`JURY TRIAL DEMANDED
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`Defendant.
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`APPLE INC.’S RENEWED MOTION TO COMPEL
`LICENSING AND NEGOTIATION DOCUMENTS AND FOR SANCTIONS
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 2 of 11 PageID #: 9756
`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 2 of 11 PageID #: 9756
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`TABLE OF AUTHORITIES
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`Page
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`I.
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`II.
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`INTRODUCTION ............................................................................................................. 1
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`ARGUMENT ..................................................................................................................... 1
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`A.
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`Maxell Can Ask Hitachi To Search For
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`And Send Maxell Documents
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`.......... 2
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`B.—
`Supports Its Practical Ability to Obtain Documents .............................................. 3
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`C.
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`D.
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`Maxell Has Access To Hitachi Confidential Infonnation ..................................... 5
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`Prejudice from Maxell’s Misrepresentations and Discovely Misconduct ............. 5
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`III.
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`CONCLUSION .................................................................................................................. 7
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 3 of 11 PageID #: 9757
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`I.
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`INTRODUCTION
`Apple previously sought an order compelling Maxell to produce relevant documents from
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`Hitachi when it became clear that Maxell was selectively producing some documents and not
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`others. D.I. 156. To avoid that order, Maxell professed its independence from Hitachi, its former
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`parent. D.I. 166 at 2. Relying on that purported independence, the Court found insufficient
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`evidence that Maxell could obtain the requested documents and suggested Apple file a renewed
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`motion if it obtained more evidence. D.I. 202 at 12. Apple now has such evidence.
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`Recent testimony from Maxell witnesses reveals that: (1) Maxell and Hitachi
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` and (3) Maxell is privy to
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`Hitachi’s AEO information. Apple also discovered that Maxell misled Apple about its diligence
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`regarding discovery from Hitachi employees. Accordingly, Apple renews its motion to compel
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`Maxell to get the requested information from Hitachi, and also seeks an order—because of its
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`misrepresentations about its abilities to get the full complement of information Apple has sought—
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`preventing Maxell from relying on any information from or about Hitachi in this case.
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`II.
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`ARGUMENT
`Maxell should not be permitted to obtain patents from Hitachi and assert them while
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`selectively producing information from Hitachi about those patents. Contrary to its prior
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`representations, Maxell has the “practical” means to obtain documents and information from
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`Hitachi and should be compelled to use those means. Diamond Consortium, Inc. v. Manookian,
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`No. 4:16CV94-ALM, 2017 U.S. Dist. LEXIS 122625, at *23-24 (E.D. Tex. Aug. 3, 2017).
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`. Yet despite its discovery obligations, Maxell has
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 4 of 11 PageID #: 9758
`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 4 of 11 PageID #: 9758
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`110— InsteadMaxeu
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`has obtained from Hitachi and produced only what pulpofls to benefit Maxell.
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`Maxell Can Ask Hitachi To Search For
`And Send Maxell Documents
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`Maxell was a wholly-owned subsidialy of Hitachi. When Hitachi transfen‘ed the Asselted
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`PWoMaxeu,—
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`. D.I. 156; Ex. A3 (Depo. ofMaxell’s 30(b)(6) witness Mr.
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`Kitagata) (“Kitagata Deposition”) at 91:19—93:2.—
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 5 of 11 PageID #: 9759
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`Maxell’s counsel wrote to Mr. Matsuo (a Hitachi employee formerly assigned to
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`Maxell) asking for documents “[a]s a courtesy to Apple.” Dkt. 166-2.
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`Wielding its relationship with Hitachi as both a sword and a shield, Maxell
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` In Eidos Display, LLC v. AU Optronics Corp., the Court granted a renewed
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`motion to compel finding that testimony “suggests that Eidos’s ability to receive documents from
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`LGD pursuant to this agreement is broader than [Eidos had] suggest[ed]”. No. 6:11-CV-201-JRG,
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`Dkt. 648 at 5‒6 (E.D. Tex. Jan. 10, 2017)).
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` Apple requests the Court to
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`compel Maxell to collect and produce documents from Hitachi relevant to the Asserted Patents.
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`B.
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`Further Supports Its Practical Ability to Obtain Documents
`The newly-discovered evidence also contradicts Maxell’s representation to this Court that
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`its relationship with Hitachi and Mr. Matsuo “disintegrated” and “fizzled long before 2018.”
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`D.I. 166 at 3; Ex. A1 at 12:9‒13. Maxell’s 30(b)(6) witness and
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`. Ex. B1 (Kitagata Depo.) at 117:15‒19, 118:2‒119:10. Moreover,
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`employees of Hitachi’s subsidiaries,
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`14:8‒15:9, 19:19‒20:9
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`. Ex. B2 (Takizawa Depo.) at
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`But Maxell’s relationship with Hitachi is so strong that Hitachi has cooperated with
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`Maxell in this case, including by offering its own employees for depositions. One named
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`inventor testified
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` Ex. B3 (Takizawa Depo.) at 17:8‒18:1. Another testified
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 6 of 11 PageID #: 9760
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`That Hitachi and Maxell’s relationship is so close that
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`underscores Maxell’s ability to obtain Hitachi’s information now. Id.
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`And Maxell’s claims that “Hitachi Ltd. is not involved in this or any related litigation”
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`and that Maxell “did not arrange anything with Hitachi” are (at best) inaccurate. Ex. B5 at
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`17:21‒18:11; Ex. B6 (2/19/20 Meet and Confer) at 31:9‒13. Hitachi’s employees are not, as
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`Maxell alleged, appearing for deposition while on vacation. Id.
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`. Ex. B7 (Oeda Depo.) at 16:1‒14, 20:8‒13
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`; Ex. B8 (Nakano Depo.) at 29:3‒30:21
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`Maxell’s 30(b)(6) witness further testified that
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` Ex. B9 (Kitagata Depo.) at 74:5‒75:17
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 7 of 11 PageID #: 9761
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` And while Japanese law may require
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` pay its inventors when it licenses
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`or assigns their patents for consideration, there is no law
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`Maxell’s close ties with Hitachi and its subsidiaries belie its claim that it cannot obtain
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`documents from Hitachi. Hitachi’s active involvement in this case further supports Apple’s
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`motion to compel. Diamond Consortium, Inc., 2017 U.S. Dist. LEXIS 122625, at *23-24; Eidos
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`Display, No. 6:11-CV-201-JRG, Dkt. 648 at 5 (“LGD’s continued financial interest in this
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`litigation further suggests that Eidos maintains a practical ability to secure these documents.”).
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`C. Maxell Has Access To Hitachi Confidential Information
`Maxell told the Court it could not access Hitachi’s documents because its employees
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`cannot view Hitachi’s confidential information. Ex. C1 (1/8/20 Hearing) at 10:20‒25. But in a
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`recent deposition, Maxell’s representative stayed in the deposition room when a Hitachi
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`employee testified about Hitachi’s confidential information. Ex. C2 (Takizawa Depo.) at
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`117:21‒118:15. Whether Maxell has had access to Hitachi confidential information all along or
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`only recently obtained access, Maxell can no longer hide behind confidentiality as an excuse.
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`D. Maxell Made Misrepresentations to Hide Hitachi Documents and Testimony
`Maxell misled Apple regarding the availability of Hitachi documents and witnesses.
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`Maxell prepared inventors to testify about their Hitachi work relating to the patents, but at the
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 8 of 11 PageID #: 9762
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`same time, counseled them to not search for documents relating to that work. One Hitachi Ltd.
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`witness testified
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`. Ex. D1 (Maeoka Dep.) at 54:23‒55:16, 90:23‒91:8, 93:11‒21. For other Hitachi
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`witnesses, prior to their depositions, Maxell represented that
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`. This was false. Ex. D3 (Oeda Depo.) at 117:21‒118:6
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`. Maxell did not produce documents and Apple was unable to question the witnesses on
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`Maxell also alleges it is entitled to pre-suit damages based on
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`by Mr. Matsuo, a Hitachi employee, but refuses to provide full discovery regarding
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`regarding Mr. Matsuo’s
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` Rather than produce documents
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`, Maxell relies on hearsay. Id. at 52:1‒16
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` These documents may prove Maxell
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`. Maxell’s refusal to produce them is highly prejudicial to Apple.
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`Second, Maxell falsely instructed Apple to reach Mr. Matsuo through Maxell’s counsel.
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`D.I. 156-2. When Apple tried to serve a subpoena on Mr. Matsuo through Maxell’s counsel—
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`exactly as Maxell’s initial disclosures instructed, Maxell’s counsel refused to accept service. D5.
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`Maxell’s counsel knew they did not represent Mr. Matsuo, and yet left incorrect (at best)
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`6
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 9 of 11 PageID #: 9763
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`information in Maxell’s disclosures until three weeks before the close of discovery, ignoring their
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`Rule 26(e) duty to supplement. Had Apple known that Mr. Matsuo was not reachable through
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`Maxell’s US lawyers, it would have included Mr. Matsuo in its motion for letters rogatory to
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`Hitachi months ago. Dkt. 146. Instead, because Maxell only recently amended its disclosures,
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`Apple has been unable to depose Mr. Matsuo, a resident of Japan, regarding the
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`. Maxell’s alleged
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`inability to coordinate Mr. Matsuo’s deposition stands in contrast to Maxell’s counsel preparing
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`and representing six Hitachi employees at their depositions.
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`E. Maxell Should Be Precluded From Using One-Sided Discovery
`Maxell relies on Hitachi evidence for its benefit, while denying Apple the full picture of
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`discovery into Hitachi it is owed. Maxell’s sword-and-shield use of its relationship with Hitachi
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`and its misrepresentations to the Court and Apple about that relationship warrant sanctions under
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`Rule 37 and the Court’s “inherent authority to prevent unfairness to [Apple] resulting from
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`[Maxell’s] proven, one-sided, access to” Hitachi and its subsidiaries. J.S.T. Corp. v. Robert
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`Bosch LLC, 2019 WL 2354631, at *8 (E.D. Mich. June 3, 2019). Even if Maxell produced all of
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`the relevant documents now, Maxell’s tactics have prevented Apple from taking full discovery.
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`Apple was not able to ask about relevant documents at the inventors’ and Maxell’s 30(b)(6)
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`witnesses’ depositions. And because discovery is now closed, Apple cannot depose Mr. Matsuo
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`or seek third party discovery from Hitachi and Maxell’s still-undisclosed licensees. Thus, Apple
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`seeks an order precluding Maxell from relying on evidence from Hitachi and Hitachi employees.
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`III. CONCLUSION
`Apple respectfully requests an order compelling Maxell to obtain the requested discovery
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`from Hitachi. In addition, based on Maxell’s discovery misconduct, Apple requests that Maxell
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`be prohibited from relying on any documents or information obtained from Hitachi.
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`7
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 10 of 11 PageID #: 9764
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`March 31, 2020
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`/s/ Luann L. Simmons
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`Luann L. Simmons (Pro Hac Vice)
`lsimmons@omm.com
`O’MELVENY & MYERS LLP
`Two Embarcadero Center
`28th Floor
`San Francisco, CA 94111
`Telephone: 415-984-8700
`Facsimile: 415-984-8701
`
`Xin-Yi Zhou (Pro Hac Vice)
`vzhou@omm.com
`O’MELVENY & MYERS LLP
`400 S. Hope Street
`Los Angeles, CA 90071
`Telephone: 213-430-6000
`Facsimile: 213-430-6407
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`Laura Bayne Gore (Pro Hac Vice)
`lbayne@omm.com
`O’MELVENY & MYERS LLP
`Times Square Tower, 7 Times Square
`New York, NY 10036
`Telephone: 212-326-2000
`Facsimile: 212-326-2061
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`Melissa R. Smith (TX #24001351)
`melissa@gilliamsmithlaw.com
`GILLIAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
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`Attorneys for Defendant Apple Inc.
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`8
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`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 11 of 11 PageID #: 9765
`Case 5:19-cv-00036-RWS Document 260 Filed 04/02/20 Page 11 of 11 PageID #: 9765
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have
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`consented to electronic service are being served with a copy of this docmnent via the Court's
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`CM/ECF system per Local Rule CV—5(a)(3) on March 31, 2020.
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`/s/ Melissa R. Smith
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`Melissa R. Smith
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`CERTIFICATE OF CONFERENCE
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`On March 31, 2020, pursuant to Local Rule CV—7(h), counsel for Defendants met and
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`conferred with cormsel for Plaintiff, and counsel for Plaintiff indicated that Plaintiff is opposed to
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`the relief sought by this Motion.
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`/s/ Melissa R. Smith
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`Melissa R. Smith
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