Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 1 of 12 PageID #: 10383
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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 OPPOSED MOTION FOR
`LEAVE TO CONDUCT TWO DEPOSITIONS
`AFTER THE FACT DEPOSITION DEADLINE
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`Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 2 of 12 PageID #: 10384
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`TABLE OF CONTENTS
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`Page
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`I.
`II.
`III.
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`IV.
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`MATERIAL FACTS ......................................................................................................... 1 
`LEGAL STANDARD ........................................................................................................ 3 
`ARGUMENT ..................................................................................................................... 3 
`A.
`The Parties Agreed that Good Cause Exists to
`Permit the Deposition of Mr. Watrous To Take Place Out of Time ...................... 3 
`Good Cause Exists to Permit the Deposition of Mr. Murphy Out of Time ........... 4 
`B.
`CONCLUSION .................................................................................................................. 7 
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`Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 3 of 12 PageID #: 10385
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`Apple seeks leave to conduct two fact depositions after the April 30 deposition deadline
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`because neither can proceed under the current pandemic circumstances. Maxell agreed for one,
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`party witness BJ Watrous (although Maxell now contends this motion is not ripe), but not the
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`other, non-party witness and resident of Japan, Patrick Murphy. Apple has worked diligently to
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`make its witnesses available despite shelter-in-place orders covering those witnesses. D.I. 231 at
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`2. Conducting Mr. Watrous’s and Mr. Murphy’s depositions before April 30 was not possible.
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`As to Mr. Watrous, Maxell does not dispute that good cause exists to take his deposition
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`out of time. But Maxell refuses to treat Mr. Murphy the same, even though good cause also
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`plainly exists to do so. Indeed, before the originally-scheduled close of fact discovery, Apple
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`listed him on its initial disclosures and told Maxell that it intended to depose him. Mr. Murphy
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`has personal knowledge of Apple’s pre-suit negotiations with Hitachi on which Maxell relies for
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`its willfulness claims and about which Maxell will not present any witness with personal
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`knowledge. Maxell does not dispute any of this. But because Mr. Murphy lives in Japan, it was
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`not possible then and is not possible now to take his deposition. Accordingly, Apple respectfully
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`requests that the Court grant leave to allow Mr. Watrous’s and Mr. Murphy’s depositions to
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`proceed out of time, as soon as the circumstances allow.
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`I.
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`MATERIAL FACTS
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`Mr. Watrous is a Vice President and Chief Commercial Counsel at Apple, identified by
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`Apple as having knowledge of, inter alia,
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` Ex. A, Apple’s 3/5/20 Second Amended Disclosures at 26. On
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`March 5, Apple told Maxell that Mr. Watrous would testify as its corporate designee regarding
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`Maxell’s 30(b)(6) topics on
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`. Ex. B, 3/5/20 M. Pensabene Email. Following the onset
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`of the pandemic, Mr. Watrous took on a central and critical role in coordinating Apple’s
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`COVID-19 response and, therefore, became unavailable to participate in deposition preparation
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`1
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`Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 4 of 12 PageID #: 10386
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`or a deposition. Apple thus withdrew its designation of Mr. Watrous as a Rule 30(b)(6) witness,
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`and the parties agreed that if Apple intends to call Mr. Watrous to testify at trial, Apple will give
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`Maxell an opportunity to take his deposition after the pandemic subsides. D.I. 277 at 2 n.3; see
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`also Exs. H and I (agreeing to Apple’s proposal for Mr. Watrous).
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`Mr. Murphy is a former Apple employee who, while at Apple, participated in the June
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`2013 meeting on which Maxell relies for its willfulness claims. See D.I. 111 at ¶ 5; D.I. 57, Ex.
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`T. Mr. Murphy has personal knowledge of Apple’s pre-suit communications with Mr. Matsuo,
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`of Maxell’s predecessor-in-interest Hitachi,
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` When Apple
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`served a subpoena on Mr. Matsuo through Maxell’s counsel—as Maxell had instructed—Maxell
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`refused to accept service. D.I. 254 at 6-7. Shortly thereafter (and before the close of discovery),
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`Apple identified non-party Mr. Murphy as having knowledge of Apple’s “[p]re-suit
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`communications with Plaintiff” in its Amended Initial Disclosures. Ex. A, Apple’s 3/5/20
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`Second Amended Initial Disclosures at 14.
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`Mr. Murphy resides in Japan, which, under the current circumstances and Japanese law,
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`has made it impossible to proceed with Mr. Murphy’s deposition. Japan does not permit
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`depositions for U.S. litigation cases, including in-person and video depositions, other than at the
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`U.S. Embassies.1 See Ex. D, U.S. Embassy (“Per the Government of Japan, ordinarily, all
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`depositions must take place on Embassy or Consulate premises”). It also “does not permit the
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`taking of testimony via telephone,” and “[v]ideo [c]onferencing is not currently available.” Id.
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`And the U.S. and Japan imposed COVID-related travel restrictions, including the U.S.’s global
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`1 There are multiple requirements that must be met to conduct depositions at one of the U.S.
`Embassies, including obtaining deposition visas for U.S. counsel and securing a reservation for
`one of the available rooms (which are typically booked weeks in advance). Id.
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`2
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`advisory to avoid all international travel and Japan’s ban on travel from the U.S. Ex. E, State
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`Department; Ex. F, Ministry of Foreign Affairs.
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`On March 14 (before fact discovery closed), Apple told Maxell that Mr. Murphy’s
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`deposition would require a schedule exception: “our current view is that we can still proceed
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`with the depositions according to the current schedule, even in view of COVID-19, with the
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`three exceptions already being discussed (Frank Casanova, Alexei Kosut, and Patrick Murphy).”
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`Ex. G, 3/14/20 L. Simmons Email. The very next day, the parties’ joint request for a schedule
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`extension referenced Mr. Murphy’s postponed deposition: “COVID-19 concerns have resulted
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`in the postponement of the depositions of an Apple engineer and a third-party fact witness.” D.I.
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`231 at 3. But even though Mr. Murphy was the only third-party fact witness the parties
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`discussed then, when Apple asked Maxell to consent to Mr. Murphy’s deposition after the fact
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`deposition deadline—as it had for Mr. Watrous’s deposition—Maxell refused because it did not
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`have “formal” notice of Mr. Murphy’s deposition. See Ex. I, 4/10/20 T. Fussell Email.
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`II.
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`LEGAL STANDARD
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`Good cause and the Court’s consent is required to modify a schedule. Fed. R. Civ. P.
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`16(b)(4). Courts in the Fifth Circuit consider four factors to determine if good cause exists:
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`(1) the explanation for the failure to comply; (2) the importance of the discovery; (3) potential
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`prejudice; and (4) availability of a continuance to cure the prejudice. See, e.g., McGee v.
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`Dolgencorp, LLC, No. 5:14-CV-90(DCB)(MTP), 2016 WL 2858888, at *1 (S.D. Miss. May 16,
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`2016) (citing Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990)).
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`III. ARGUMENT
`A.
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`The Parties Agreed that Good Cause Exists to Permit the Deposition of Mr.
`Watrous To Take Place Out of Time
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`The parties agreed that good cause exists to permit Mr. Watrous’s deposition after April
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`3
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`30. Exs. H and I. Mr. Watrous remains central to Apple’s response to COVID-19 and has been
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`unavailable to prepare for and participate in a deposition. Thus, as the parties told the Court in a
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`joint filing, “[t]o the extent Apple intends to call BJ Watrous at trial, Apple and Maxell have
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`agreed that Apple will offer him for deposition before trial and as soon as the COVID-19
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`pandemic subsides.” D.I. 277 at 2 n.3. Leave is required to conduct this deposition after the
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`deadline, but in the meet and confer, Maxell first suggested there was no agreement (Ex. J), then
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`backed down, and then argued the motion is not ripe. Given that the parties do not disagree,
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`permission should be sought now in accordance with the parties’ agreement, rather than bother
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`the Court with this issue later. There is no sense in leaving this issue twisting in the wind,
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`particularly where Maxell has already agreed.
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`B.
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`Good Cause Exists to Permit the Deposition of Mr. Murphy Out of Time
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`Good cause also exists to permit Mr. Murphy’s deposition after April 30. Mr. Murphy is
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`a third-party witness, residing in Japan, with knowledge of Apple’s pre-suit communications
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`with Hitachi that form the basis for Maxell’s willful infringement claims. Apple identified Mr.
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`Murphy as a witness on March 5 and specifically informed Maxell of its intent to depose Mr.
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`Murphy on March 14, more than two weeks before the original close of fact discovery. But the
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`rapidly-evolving travel restrictions caused by COVID-19 and restrictions on depositions imposed
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`by Japanese law prevented Apple from being able to proceed with his deposition. Maxell’s sole
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`basis for refusing to agree to a later deposition of Mr. Murphy is that, while there is no dispute
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`Maxell knew Apple intended to depose Mr. Murphy before discovery closed, Apple did not
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`actually serve a subpoena on him. Maxell’s sudden exaltation of form over function is telling
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`given that Maxell has hidden its own witness to these negotiations, Mr. Matsuo, and refused to
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`produce him for a deposition even after telling Apple that he could be reached via Maxell’s
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`counsel. Maxell’s continued obstinance for Mr. Murphy’s deposition is meritless.
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`4
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`The explanation for the failure to comply. The sole reason that Apple could not
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`complete Mr. Murphy’s deadline before the April 30 deadline is COVID-19. There is no dispute
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`that the pandemic has caused severe disruptions to the schedules and operations of the Court, the
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`parties, and third parties. D.I. 231 at 2. Despite these challenges, Apple has worked diligently to
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`complete fact discovery and successfully present 17 fact witnesses for depositions, 12 remotely,
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`by the April 30 deadline. D.I. 231 at 2, D.I. 283. And while other factors, including Maxell’s
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`continuing failure to serve infringement contentions that comply with P.R. 3-1(g) and this
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`Court’s orders, justify changes in the current schedule (see D.I. 284), permitting Apple to
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`conduct Mr. Murphy’s deposition after April 30 would not hold up the existing schedule.
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`Maxell does not contend that a deposition after April 30 is per se unjustified, and cannot,
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`because it agrees that good cause exists for Mr. Watrous. Due to restrictions precluding travel
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`from the U.S. to Japan, Apple cannot depose Mr. Murphy before April 30 without either flying
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`Mr. Murphy to the continental U.S. (risking his health and leaving him with no way to return or
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`no way to return without a mandatory 14-day quarantine) or violating Japanese law. Exs. D, F.
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`Maxell’s sole basis for refusing to agree to conduct Mr. Murphy’s deposition out of time
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`is that Apple did not serve a subpoena for Mr. Murphy’s deposition before March 31. Maxell’s
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`argument exalts form over function and fails. First, Maxell does not—nor could it—argue that it
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`did not have timely notice that Apple intended to take Mr. Murphy’s deposition. Apple
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`identified Mr. Murphy as a third-party witness with relevant knowledge well before the close of
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`fact discovery. Ex. A, Apple’s 3/5/20 Second Amended Initial Disclosures at 14. And more
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`than two weeks before the close of fact discovery, Apple specifically informed Maxell that it
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`intended to depose Mr. Murphy. Ex. G, 3/14/20 L. Simmons Email. Because he lives in Japan
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`and in view of evolving global travel restrictions caused by COVID-19, Apple could not secure a
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`5
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`date or location for Mr. Murphy’s deposition. Apple thus informed Maxell that Mr. Murphy’s
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`deposition would likely require an exception to the schedule. Id. The parties’ joint submission,
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`filed the next day, referenced the need to postpone his deposition. D.I. 231 at 3.
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`Second, while a non-party’s attendance may be compelled with a Rule 45 subpoena, a
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`subpoena is not required for a third-party witness who is willing to be deposed. See Fed. R. Civ.
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`P. 30(a)(1). Because Mr. Murphy is willing to be deposed, a subpoena was not necessary. And
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`Maxell does not dispute that (1) because he resides in Japan, Mr. Murphy cannot be deposed by
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`telephone or videoconference (Ex. D) and (2) Apple could not (and cannot) proceed with an in-
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`person deposition at a U.S. Embassy until COVID-19 travel restrictions are relaxed.2 Apple thus
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`could not specify the date or location for Mr. Murphy’s deposition in a Rule 45 subpoena or
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`deposition notice, meaning the subpoena or notice would have provided no more information
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`than what Maxell already had from Apple’s March 14 written notice to Maxell. Indeed, Maxell
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`did not raise any concerns about this deposition before doing so belatedly on April 10.
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`The importance of the discovery.
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` The two people who have personal knowledge of
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`that meeting are Mr. Murphy and Mr. Satoshi Matsuo, the Hitachi employee that Maxell told
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`Apple it should contact for the purposes of this litigation through Maxell’s outside counsel. Id.
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`But when Apple tried to subpoena Mr. Matsuo through Maxell’s counsel in early March—as
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`Maxell’s initial disclosures instructed—Maxell’s counsel made a last-minute about-face and
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`refused to accept service. D.I. 254 at 6-7. Mr. Murphy, therefore, is the only witness who can
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`2 While the most severe restrictions, like Japan’s ban on travel from the U.S., were imposed later,
`the parties recognized the uncertainty caused by the then-evolving travel restrictions in their
`March 15 joint submission to the Court. D.I. 231 at 2.
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`6
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`shed light on the highly-disputed pre-suit communications between Apple and Hitachi. D.I. 254
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`at 7. Mr. Murphy’s testimony is therefore irrefutably important to this case.
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`Potential Prejudice. Maxell cannot show any prejudice. Having agreed that a later
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`deposition for Mr. Watrous would be appropriate, Maxell does not—and cannot—assert that
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`conducting any depositions after April 30 is per se prejudicial, particularly in view of the
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`unprecedented disruptions to business and travel. And Maxell cannot claim prejudice from lack
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`of notice because it does not—and cannot—allege it had no notice of Apple’s intent to depose
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`Mr. Murphy deposition before March 31. See Ex. G, 3/14/20 L. Simmons Email.
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`Nor can Maxell claim that Apple’s deposition of this third-party witness after the
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`deadline would require undue work, time, or expense by Maxell. Maxell does not represent Mr.
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`Murphy and will not be required to prepare him for Apple’s deposition. And having not sought
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`to depose Mr. Murphy itself, Maxell evidently does not want (or need) his testimony in this case.
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`Apple has deposed three Maxell witnesses and eight third parties (including inventors), and has
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`not used anywhere close to the deposition hours it has been allowed by the Court. D.I. 42 at 4.
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`Finally, because Apple timely identified Mr. Murphy as a potential witness for trial,
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`Maxell cannot prevent his testimony. Permitting his deposition out of time would provide both
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`parties fair notice of his expected testimony, thereby avoid undue surprise at trial. If Mr.
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`Murphy is unable (or unwilling) to travel from Tokyo to attend trial in Texarkana, permitting his
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`deposition would preserve his testimony for the jury on an issue material to the dispute.
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`Availability of a continuance to cure the prejudice. Other than the relief sought by
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`this Motion, there is no need for any other continuance to cure any prejudice.
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`IV. CONCLUSION
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`Apple respectfully requests leave to conduct the depositions of BJ Watrous and Patrick
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`Murphy after the April 30, 2020 deadline for fact depositions.
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`7
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`Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 10 of 12 PageID #: 10392
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`May 1, 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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`Marc J. Pensabene (Pro Hac Vice)
`mpensabene@omm.com
`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 319 Filed 05/06/20 Page 11 of 12 PageID #: 10393
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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 Coufl's
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`CM/ECF system per Local Rule CV—5(a)(3) on May 1, 2020.
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`/s/ Melissa R. Smith
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`Melissa R. Smith
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`Case 5:19-cv-00036-RWS Document 319 Filed 05/06/20 Page 12 of 12 PageID #: 10394
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`CERTIFICATE OF CONFERENCE
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`On May 1, 2020, pursuant to Local Rule CV-7(h), counsel for Defendant met and conferred
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`by telephone with counsel for Plaintiff. In attendance for Defendant were Luann Simmons,
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`Vincent Zhou, Marc Pensabene, and Tom Gorham. In attendance for Plaintiff were Jamie Beaber,
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`Kfir Levy, Tripp Fussell, Tiffany Miller, Saqib Siddiqui, and Geoff Culbertson. Counsel for
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`Plaintiff stated that, despite its explicit, previous agreements to allow Mr. Watrous’s deposition
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`out-of-time, Plaintiff stated that it is now opposed to Defendant’s request for leave to conduct that
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`deposition out of time. Plaintiff also stated that remains opposed to Defendant’s request for leave
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`to conduct Patrick Murphy’s deposition out of time. However, Plaintiff does not oppose
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`Defendant’s request on the grounds that Defendant should have filed this motion before the
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`deadline to complete fact depositions (as Plaintiff’s counsel refused to present themselves for a
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`meet and confer any sooner than May 1). Discussions on this issue have conclusively ended in an
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`impasse, leaving an open issue for the court to resolve.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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`10
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