Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 1 of 11 PageID #: 26886
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`Plaintiff,
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`Case No. 5:19-cv-00036-RWS
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`JURY TRIAL DEMANDED
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`MAXELL, LTD.,
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`v.
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`APPLE INC.,
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`Defendant.
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`MAXELL, LTD.’S SUR-REPLY TO APPLE INC.’S MOTION FOR PARTIAL
`SUMMARY JUDGMENT LIMITING MAXELL’S CLAIM FOR DAMAGES FOR
`THE ’999, ’498, ’493, AND ’317 PATENTS UNDER 35 U.S.C. § 287(a) AND FOR
`NO ENHANCED DAMAGES UNDER 35 U.S.C. § 284
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 2 of 11 PageID #: 26887
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`TABLE OF CONTENTS
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`GENUINE ISSUES OF MATERIAL FACT REMAIN REGARDING ACTUAL
`NOTICE ............................................................................................................................. 1
`GENUINE ISSUES OF MATERIAL FACT REMAIN AS TO ENHANCED
`DAMAGES ........................................................................................................................ 3
`A.
`Apple’s Motion for No Enhanced Damages is Not Ripe ....................................... 3
`B.
`Apple’s Conduct Favors an Enhanced Damages Award ....................................... 4
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`i
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`I.
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`II.
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 3 of 11 PageID #: 26888
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`Cases
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`TABLE OF AUTHORITIES
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`Page(s)
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`Amsted Indus. Inc. v. Buckeye Steel Castings Co.,
`24 F.3d 178 (Fed. Cir. 1994)........................................................................................................... 1
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`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) ........................................................................................................................ 3
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`Gart v. Logitech,
`254 F.3d 1334 (Fed. Cir. 2001)............................................................................................... 1, 2, 3
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`Massachusetts Institute of Technology v. Abacus Software, Inc.,
`No. 5:01-cv-344, 2004 WL 5268125 (E.D. Tex. Sept. 29, 2004)................................................... 1
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`Meridian Manufacturing, Inc. v. C & B Manufacturing, Inc.,
`340 F.Supp.3d 808 (N.D. Iowa 2018) ............................................................................................. 5
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`SRI Int’l, Inc. v. Advanced Tech. Labs., Inc.,
`127 F.3d 1462 (Fed. Cir. 1997)....................................................................................................... 2
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`WesternGeco L.L.C. v. ION Geophysical Corp.,
`837 F.3d 1358 (Fed. Cir. 2016)....................................................................................................... 4
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`ii
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 4 of 11 PageID #: 26889
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`Genuine issues of material fact exist here. Apple cannot establish otherwise through
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`unsupported say-so or by ignoring the facts themselves. But that is plainly Apple’s strategy—even
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`to the point of deliberately quoting the wrong part of a document, when the right part of the
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`document is harmful to Apple’s position. When the facts are measured against the law and viewed
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`in the light most favorable to Maxell—as they must be here—there is no question that genuine
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`disputes as to material facts remain.
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`I.
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`Genuine Issues of Material Fact Remain Regarding Actual Notice
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`Apple again suggests that a party must explicitly allege infringement for actual notice to
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`be found. Apple ignores the law. As Maxell showed in its Opposition, courts have held that an
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`offer to license can be deemed actual notice because “[t]he whole point of offering a license is to
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`insulate a licensee from infringement charges by the licensor.” Gart v. Logitech, 254 F.3d 1334,
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`1346 (Fed. Cir. 2001). The June 2013 letter
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`predecessor
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` Ex. C (AM00712194). In other words, Maxell’s
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` than the letters at issue in the cases Apple cited,
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`which merely provided notice of ownership of the patents and, at most, invited the letter recipient
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`to review the patent(s) to gauge any potential interest in a license which the patentee was willing
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`to make available. Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 186-87 (Fed.
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`Cir. 1994); Massachusetts Institute of Technology v. Abacus Software, Inc., No. 5:01-cv-344, 2004
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`WL 5268125,a t *2 (E.D. Tex. Sept. 29, 2004). Here, the infringement assertion is clear enough
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`from the fact that
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`This can mean nothing other than: Apple is infringing these patents and needs to take a license.
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 5 of 11 PageID #: 26890
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`Apple’s attempt to distinguish Maxell’s cited case law by asserting that Gart, for example,
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`found actual infringement where the need for a license was combined with additional infringement
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`allegations (Reply at 2), fails as such a combination is also present here. As Maxell explained in
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`detail, the June 2013 materials
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`. Opp. at 6-7. The materials even showed
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`. Opp. at 6-7. Apple tries to divert the Court’s attention from these statements made
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`by Hitachi (and relied upon by Maxell in its Opposition) by pointing instead to a different portion
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`of the June 2013 letter.1 Cf. Reply at 2 (quoting
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`) with Opp. at 6 (quoting
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`). The fact that
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` does not nullify that the June 2013 materials also
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`contained everything required for actual notice—i.e., it informed Apple of the identity of the patent
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`and the activity that is believed to be an infringement and contained a proposal to abate the
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`infringement. SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1470 (Fed. Cir. 1997).
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`Ignoring the disputed materials facts is not the same as having no disputed material facts.
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` is distinguishable from other
`1 Apple also argues that identification of
`cases where identification of “water tank products” and “mobile telecommunications and infrastructure
`technologies” were sufficient to survive summary judgment. Reply at 2-3. Apple’s conclusory statement
`that the two are different cannot erase a dispute of material fact. The only entity that can decide whether
`identification
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 6 of 11 PageID #: 26891
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`To the extent Apple continues to assert that actual notice must also include an allegation
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`of specific infringed claims, Maxell has already shown that such allegation is not required. Opp.
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`at 7-8. As Maxell pointed out, while the correspondence in Gart referenced specific claims, the
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`Court did not hold that it is required. 254 F.3d at 1346. And Apple does not address the fact that
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`actual notice has been found where specific claims were not identified. See Opp. at 8.
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`To determine whether a genuine issue of material fact exists as to whether the June 2013
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`materials provided actual notice, the materials must be compared against what is required under
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`the law. Maxell has done just that. How the June 2013 materials compared to additional notice of
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`infringement that Maxell provided at a later point in time is irrelevant.
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`Maxell may bear the burden of proving actual notice. It intends to satisfy that burden at
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`trial. But summary judgment should only be granted “if the movant shows there is no genuine
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`dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
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`Civ. P. 56(a) (emphasis added). As Maxell showed in its Opposition, Apple, as movant, has failed
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`to satisfy that burden. When the evidence is viewed in the light most favorable to the non-moving
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`party, as it must be, it is clear that genuine disputes as to material fact remain. Anderson v. Liberty
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`Lobby, Inc., 477 U.S. 242, 255 (1986).
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`II.
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`Genuine Issues of Material Fact Remain as to Enhanced Damages
`A.
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`Apple’s Motion for No Enhanced Damages is Not Ripe
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`Although Apple asserts that “the undisputed material facts show no egregious misconduct
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`that is required for enhanced damages” (Reply at 4), Apple’s blanket assertion that the material
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`facts are undisputed does not make it so. As discussed in detail in Maxell’s Opposition, Maxell
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`identified numerous material factual disputes regarding its willfulness claim, including specific
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`examples of evidence showing Apple’s egregious and deliberate behavior. Opp. at 12-15. Based
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 7 of 11 PageID #: 26892
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`on this evidence, a jury finding of willfulness in this case would be highly relevant to the Court’s
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`determination of whether to enhance damages.
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`Apple states that “basic willfulness is not enough” for enhanced damages (Reply at 4), and
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`Maxell agrees. But this is clearly not a case of “basic willfulness,” where Maxell’s request for
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`enhanced damages is based only on Apple’s pre-suit knowledge of the asserted patents. The
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`evidence Maxell presented shows that Apple’s behavior over the past seven years has established
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`a pattern of bad faith. Apple’s behavior demonstrates a complete lack of any objectively reasonable
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`basis to decline a license, or to take any real remedial action to stop infringing the asserted patents.
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`Such behavior is well outside the scope of standard patent litigation and constitutes egregious
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`behavior. The Court cannot properly reach the discretionary issue of enhanced damages until after
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`a determination of willfulness. See WesternGeco L.L.C. v. ION Geophysical Corp., 837 F.3d 1358,
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`1362-64 (Fed. Cir. 2016) (“[I]f willfulness is established, the question of enhanced damages must
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`be left to the district court’s discretion.”).
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`B.
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`Apple’s Conduct Favors an Enhanced Damages Award
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`Maxell does not concede that the enhancement question is ripe; quite the opposite, Maxell’s
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`analysis of the relevant Read factors affirmatively establishes genuine disputes of material fact
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`that render summary judgment improper. And the Court has not “already rejected Maxell’s
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`accusation that Apple has committed any ‘misconduct’ in this case.” Reply at 5. Apple fails to
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`mention that the Court granted-in-part Maxell’s second motion to compel document production
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`and source code (D.I. 295 at 23 and 34), and the Court has yet to issue a decision on Maxell’s
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`pending Motion for Sanctions (D.I. 210) which also concerns Apple’s failure to comply with its
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`discovery obligations and the resulting prejudice to Maxell. Even if the Court denies Maxell’s
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`pending Motion for Sanctions, Apple has not identified any cases stating that a Court can enhance
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`damages based on litigation behavior only if such behavior was also sanctioned.
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 8 of 11 PageID #: 26893
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`The other material facts identified by Apple as allegedly not in dispute are similarly
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`erroneous. Despite Apple’s statement to the contrary, Maxell unambiguously disputes that “Apple
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`promptly and diligently investigated Maxell’s allegations and timely communicated its
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`noninfringement and invalidity positions to Maxell.” Reply at 5. As described in Maxell’s
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`Opposition, Apple did not, for example,
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`. Opp. at 14. Certainly, material factual disputes exist as to
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`Maxell further disputes that “
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`.” Reply at 5.
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`Rather than being “speculation,” Maxell has raised a genuine dispute as to whether
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` (see Opp. at 15), and such deceitful conduct is characteristic of the type
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`of conduct that warrants enhanced damages.
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`In sum, there are numerous disputed material facts in the record that could lead the Court
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`to find enhanced damages appropriate. Thus, the Court should deny Apple’s motion. See Meridian
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`Manufacturing, Inc. v. C & B Manufacturing, Inc., 340 F.Supp.3d 808, 844 (N.D. Iowa 2018) (“I
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`find the summary judgement record to be insufficient for me to make a finding, as a matter of law,
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`that enhanced damages under § 284 are not recoverable. If the jury finds willful infringement, I
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`will consider an award of enhanced damages based on the entire trial record.”).
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`For the reasons set forth above and in Maxell’s Opposition, Apple’s motion should be
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`denied.
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 9 of 11 PageID #: 26894
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`Dated: August 6, 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
`William J. Barrow
`Baldine B. Paul
`Tiffany A. Miller
`Michael L. Lindinger
`Saqib J. Siddiqui
`Bryan C. Nese
`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
`wbarrow@mayerbrown.com
`bpaul@mayerbrown.com
`tmiller@mayerbrown.com
`mlindinger@mayerbrown.com
`ssiddiqui@mayerbrown.com
`bnese@mayerbrown.com
`agelsleichter@mayerbrown.com
`cbakewell@mayerbrown.com
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`Robert G. Pluta
`Amanda Streff Bonner
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 10 of 11 PageID #: 26895
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`MAYER BROWN LLP
`71 S. Wacker Drive
`Chicago, IL 60606
`(312) 782-0600
`rpluta@mayerbrown.com
`asbonner@mayerbrown.com
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`Counsel for Plaintiff Maxell, Ltd.
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`Case 5:19-cv-00036-RWS Document 496 Filed 08/10/20 Page 11 of 11 PageID #: 26896
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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 6th day of August 2020, with a copy of this document via
`electronic mail pursuant to Local Rule CV-5(d).
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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