Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 1 of 8 PageID #: 10347
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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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`v.
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`APPLE INC.,
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`Plaintiff,
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`Defendant.
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`Case No. 5:19-cv-00036-RWS
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`JURY TRIAL DEMANDED
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`MAXELL, LTD.’S SUR-REPLY IN OPPOSITION TO 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 315 Filed 05/05/20 Page 2 of 8 PageID #: 10348
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`Maxell has no control over Hitachi, Ltd. (“Hitachi”). Maxell already requested Hitachi
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`provide the documents sought in Apple’s motion, but Hitachi chose not to respond. And Maxell
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`raised no objection and presented no obstacle to Apple’s own attempts to obtain materials directly
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`from Hitachi. However, Apple failed to follow-up on that process and there is simply nothing more
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`Maxell can do to obtain the information Apple believes Hitachi may possibly possess.
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`Whether one company has control over another is a fact-specific inquiry, as evidenced by
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`the number of factors Courts are directed to consider when evaluating the issue. Control cannot be
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`deemed to exist based on unsupported assertions or extrapolations. Yet that is precisely what Apple
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`has requested of this Court. Apple cites Maxell’s past relationship with Hitachi, current business
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`dealings with Hitachi subsidiaries that are unrelated to the asserted patents, and the assistance
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`provided by inventors in this case in their personal capacity, all in hopes that if it raises enough
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`ancillary connections the Court will speculate that more must exist and find control. But the truth
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`is, there is no control and no evidence (whether allegedly raised by Apple or not) that establishes
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`a current relationship between Maxell and Hitachi that rises anywhere close to the level of control
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`Apple asserts. Indeed, if you dig hard enough, it is not difficult to find the types of connections on
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`which Apple relies between many companies. Even Apple has been reported to be joining forces
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`with Google and Amazon on a venture to create a standard to regulate smart home technology.1
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`Yet, Apple itself surely would not agree that it is subject to Google or Amazon’s control such that
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`it is under an obligation to turn over any documents requested by these competitors.
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`I.
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`The MOU Does Not Obligate Hitachi to Provide the Requested Documents
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`Apple raises issue with the fact that Maxell’s request for documents from Hitachi did not
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`include the words “pursuant to the MOU.” But reference to an inapplicable agreement would be
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`1 https://www.androidcentral.com/google-apple-and-amazon-join-hands-creating-new-smart-home-standard.
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 3 of 8 PageID #: 10349
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`no more effective than the request that was made.
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`Maxell disputes that
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`. But rather than waste time addressing the
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`argument, Maxell focused on the fact that the terms of the MOU do not provide Maxell the ability
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`to obtain the requested documents from Hitachi, which is appropriate given that the Court focused
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`on the terms in denying Apple’s original motion. Specifically, Maxell showed that the provision
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`relied on by Apple
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`Opp. at 1, Ex. A. Whereas Apple asserts the provision is broad enough to cover
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`.2 See
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` it provides no basis on which to expand the scope of the provision
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` Id.3 The Maxell testimony Apple cites to support an argument that Maxell
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`can obligate “Hitachi” to look for documents4 does not support Apple’s interpretation as the
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`testimony does not actually address the scope of the governing provision, nor does it address the
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`distinction between Hitachi, Ltd. and HCE. Thus, such testimony neither contradicts Maxell’s
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`position nor supports Apple’s assertion that the MOU could obligate Hitachi to provide documents
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`under the circumstances present here, regarding an assertion of Maxell’s own patents.
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`II. Maxell Has Not Selectively Produced Documents or Information
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`That Apple now sinks to arguing that Maxell actually has the licenses Apple seeks shows
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`just how far it is trying to stretch the record. In response to Apple’s original motion, Maxell stated
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`that “Apple now claims Maxell withheld materials, despite those materials not being in Maxell’s
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`possession, custody or control” and noted that Maxell cannot even see such materials. D.I. 166 at
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`2 Maxell need not limit its response to Apple’s renewed motion to arguments that were previously raised. Moreover,
`the timing of Maxell’s argument does not itself alter the scope of the MOU. The MOU says what it says.
`3 Although Apple argues Mr. Matsuo’s assistance was not limited to
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`evidence his assistance was provided pursuant to the subject provision.
`4 Although Apple criticizes Maxell for drawing a distinction between Maxell’s ability to make a request for
`documents and “Hitachi’s” obligation to provide such documents, Maxell is merely highlighting the testimony that
`was actually given versus the conclusion Apple tries to extrapolate from it. See Reply at 1.
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 4 of 8 PageID #: 10350
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`1. In response to the renewed motion, Maxell states it “has not selectively responded to any request
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`or otherwise used Hitachi materials as a sword and a shield. Rather, … Maxell provided all relevant
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`information in its possession, custody, or control.” Opp. at 7. Apple’s accusation that Maxell has
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`been withholding documents that it actually has is completely belied by the record.5
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`III. Maxell Does Not Have A Relationship with Hitachi Sufficient to Establish Control
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`Apple asserts the relationship between Maxell and Hitachi is deeper than Maxell is willing
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`to admit, but Maxell has addressed every alleged connection raised by Apple.
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`Apple acknowledges that Maxell (not Hitachi) “is the driving force behind” the inventors’
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`appearance for deposition. Reply at 4. While Apple asserts that it is not credible each witness
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`personally chose to participate in their depositions, that is exactly what the testimony shows. See
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`Opp. at 3-4. Apple’s continued insistence on cherry-picking portions of inventor testimony, despite
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`the full testimony presented by Maxell, does not establish otherwise.6 Nor does Apple’s argument
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`that companies “with the separation that Maxell alleges exists” do not reimburse expenses. It is
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`routine for parties to reimburse deposition expenses for third-party inventors. This fact doesn’t
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`establish control. Moreover, it is not incredible at all that these inventors wished to appear for
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`depositions to defend their own invention, and to experience a trip to the United States.7
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`Inventor Bonuses. Apple’s position of the law of Japan, without any actual discussion or
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`support is unreliable and incorrect. Maxell’s witness testified that bonuses are paid to inventors
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`according to both Japanese law and corporate regulation. See Opp. at 4. Regardless, this provides
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`no basis on which to find any control relationship between Maxell and Hitachi.
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`5 Apple’s unsupported accusation of such unethical conduct is itself a sanctionable offense.
`6 As Apple again raises the testimony of Mssrs. Takizawa and Nakano, Maxell again raises the fact that neither even
`works for Hitachi, Ltd.—the entity with respect to whom Apple asserts Maxell has control over.
`7 Indeed, Mr. Maeoka (the only Hitachi, Ltd. employee to appear) testified that he participated in the deposition
`because “
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 5 of 8 PageID #: 10351
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`Overlap of Employees. Maxell does not “hide” that Mr. Katagishi is employed by Hitachi
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`but is seconded to a Hitachi subsidiary. As Apple admits, Maxell explicitly set forth such fact in
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`its Opposition. And, there is no evidence that Mr. Katagishi does any work for Maxell. The only
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`connection is his voluntary appearance at deposition, during which he testified that he did not
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`speak to Hitachi about the deposition. Opp. at 3. At bottom, Apple does not point to any current
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`overlap in employees between Hitachi and Maxell. It points only to Mr. Takizawa who, on behalf
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`of Hi-ICS,
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` unrelated to the asserted patents or this litigation.
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`Opp. at 2-3. Any conclusion regarding the relationship between Hitachi, Ltd. and Maxell drawn
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`from Mr. Takizawa’s work would be pure speculation.8 Again, this cannot establish control.
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`IV. Maxell’s Prior Relationship with Mr. Matsuo Does Not Establish Control
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`Mr. Matsuo represented Maxell in licensing negotiations with Apple for a short period of
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`time, years ago, following assignment of the patents. That they shared confidential and privileged
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`information in connection with such activities is unsurprising. As Mr. Loudermilk recently
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`testified,
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`Loudermilk confirmed that Mr. Matsuo’s relationship with Maxell ended long before this case:
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` Loudermilk Rough at 27:23-28:5. Mr.
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` Id. at 110:7-11. The Court already held that Mr. Matsuo’s past
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`assignment, absent explanation, does not support a finding that Maxell has the present ability to
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`8 Moreover, the work cited by Apple does not show any exchange or overlap of management between Hitachi and
`Maxell. As this Court has held, “[t]he lack of overlapping management indicates that the cooperation between the
`two is insufficient to find legal authority.” D.I. 202 at 7-8 (citation omitted).
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 6 of 8 PageID #: 10352
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`control Hitachi documents. D.I. 202 at 7. Maxell’s claim of privilege survives termination of the
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`relationship, and does not alter the Court’s earlier holding.
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`Apple and Maxell agreed in June 2019 that Maxell would make inventors available for
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`deposition in the United States. See D.I. 42 (Discovery Order) at ¶5(b)(iv). Thus, Maxell (not
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`Apple) reached out in January 2020 to schedule the inventor depositions, as Maxell was concerned
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`that, if the parties waited too long, the inventors would not have enough notice to schedule travel.
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`No such agreement was made regarding Mr. Matsuo. Any assumption by Apple that Maxell would
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`(or even could) make Mr. Matsuo available in the U.S. on short notice, particularly in view of
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`Maxell’s proactive approach with respect to the inventors, was completely unfounded.
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`V.
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`Sanctions are Not Warranted
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`Maxell has not misrepresented its relationship with, or its ability to obtain materials from,
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`Hitachi. Quite the opposite, Maxell requested the materials Apple seeks from Hitachi, but to no
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`avail. Maxell has never hid the fact that HCE transferred certain information to it (that was
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`produced) or that certain inventors continue to work at Hitachi (but appeared for deposition in their
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`personal capacity). Such facts do not reveal Maxell to be duplicitous. Maxell has not precluded
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`Apple from obtaining any information in this case. Maxell simply cannot produce documents that
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`it does not have, and cannot get (if they even exist over and above what Apple already has). While
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`Apple contests Maxell’s ability to obtain the documents it seeks, the evidence Apple relies on does
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`not support its contention. The facts remain Maxell cannot obtain these documents and the
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`documents sought by Apple bear little to no relevance to this case. D.I. 166 at 5-7. Apple’s tenuous
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`argument seeking such documents does not establish that sanctions are appropriate. Indeed, given
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`the lack of support for Apple’s Motion, it appears the true intent of Apple’s Motion is to propose
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`particularly harsh sanction, which taken at face value would preclude even Maxell’s reliance on
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`the asserted patents. There is no basis for Apple’s motion or for its requested relief.
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 7 of 8 PageID #: 10353
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`Dated: May 4, 2020
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`By:
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`6
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`/s/ Jamie B. Beaber
`Geoff Culbertson
`Kelly Tidwell
`Patton, Tidwell & Culbertson, LLP
`2800 Texas Boulevard (75503)
`Post Office Box 5398
`Texarkana, TX 75505-5398
`Telephone: (903) 792-7080
`Facsimile: (903) 792-8233
`gpc@texarkanalaw.com
`kbt@texarkanalaw.com
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`Jamie B. Beaber
`Alan M. Grimaldi
`Kfir B. Levy
`James A. Fussell, III
`Baldine B. Paul
`Tiffany A. Miller
`Saqib J. Siddiqui
`Bryan C. Nese
`William J. Barrow
`Alison T. Gelsleichter
`Clark S. Bakewell
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, DC 20006
`Telephone: (202) 263-3000
`Facsimile: (202) 263-3300
`jbeaber@mayerbrown.com
`agrimaldi@mayerbrown.com
`klevy@mayerbrown.com
`jfussell@mayerbrown.com
`bpaul@mayerbrown.com
`tmiller@mayerbrown.com
`ssiddiqui@mayerbrown.com
`bnese@mayerbrown.com
`wbarrow@mayerbrown.com
`agelsleichter@mayerbrown.com
`cbakewell@mayerbrown.com
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`Robert G. Pluta
`Amanda Streff Bonner
`Mayer Brown LLP
`71 S. Wacker Drive
`Chicago, IL 60606
`(312) 782-0600
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`Case 5:19-cv-00036-RWS Document 315 Filed 05/05/20 Page 8 of 8 PageID #: 10354
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`rpluta@mayerbrown.com
`asbonner@mayerbrown.com
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`Counsel for Plaintiff Maxell, Ltd.
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that all counsel of record who are deemed to have consented to
`electronic service are being served this 4th day of May 2020, with a copy of this document via
`electronic mail.
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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