Case 6:22-cv-01162-ADA Document 104 Filed 06/11/24 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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` Plaintiff,
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`PARKERVISION, INC.,
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` v.
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`REALTEK SEMICONDUCTOR CORP.,
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` Defendant.
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` Case No. 6:22-cv-1162-ADA
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`DISCOVERY ORDER
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`On June 6, 2024, counsel for Plaintiff ParkerVision, Inc. (“ParkerVision”) and Defendant
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`Realtek Semiconductor Corp.’s (“Realtek”) submitted to the Court a chart summarizing their
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`discovery disputes.
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`As to the disputes, ParkerVision requested that Realtek produce distributor agreements
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`and distributor reports/exchanges in response to Request for Production Nos. 11, 16, 17, 27, 39,
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`44, 49, 50, 51, 52, and 53. Additionally, ParkerVision requested that Realtek produce marketing,
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`business plans, sales projections, competitor analyses, and other financial documents in response
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`to Request for Production Nos. 15, 23, 32, and 34. Realtek requested that the Court deny
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`ParkerVision’s requests.
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`DISTRIBUTION AGREEMENTS AND REPORTS
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`PARKERVISION’S POSITION
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`Realtek refuses to produce its distributor agreements and distributor reports so that it can
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`hide sales and/or importation of infringing Realtek chips into the United States. Contrary to
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`Realtek’s position, the discovery ParkerVision seeks is relevant to damages.
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`Case 6:22-cv-01162-ADA Document 104 Filed 06/11/24 Page 2 of 8
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`“Where a physical product is being employed to measure damages . . . territoriality is
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`satisfied when [] any one of those domestic actions for that unit (e.g., sale) is proved to be
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`present, even if others of the listed activities for that unit (e.g., making, using) take place
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`abroad.” Carnegie Mellon Univ. v. Marvell Tech. Group, Ltd., 807 F.3d 1283, 1306 (Fed. Cir.
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`2015). “Significantly, once one extends the extraterritoriality principle to confining how
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`damages are calculated, it makes no sense to insist that the action respecting the product being
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`used for measurement itself be an infringing action.” Id. The inquiry is focused on the “causal
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`relationship to the foreign conduct for which recovery is sought” to the infringement. Brumfield
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`v. IBG LLC, 97 F.4th 854, 878 (Fed. Cir. 2024).
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`Thus far, Realtek has produced approximately seven distributor agreements. Each
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`distributor agreement requires the distributor to provide Realtek with information and reports at
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`weekly/monthly intervals, including (i) the quantities of Realtek chips sold, (ii) distributor
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`customer information (i.e., to whom Realtek’s distributors sell chips), (iii) the identity of third-
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`party products incorporating a Realtek chip, (v) resale price, and (vi) customers’ down-stream
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`distribution and sales of third-party products incorporating a Realtek chip. See Ex. 3 at § §
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`5.1.10, 5.1.12, 7.1, 7.2, and 7.7. The reporting information also includes market trends, projected
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`demand, sales plans, customer lists, and the status of new-product promotion. Id.
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`And the Realtek agreements indicate that Realtek designates third-party distributors to
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`focus their sales and/or importation operations exclusively on select geographic locations,
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`including the U.S. See Ex. 4 at § 1.2.
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`Realtek’s refusal to produce all distributor contracts and follow-on distributor
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`reports/exchanges bars ParkerVision from understanding Realtek’s sales and importation
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`Case 6:22-cv-01162-ADA Document 104 Filed 06/11/24 Page 3 of 8
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`operations of accused Realtek chips into the U.S.—facts that may be relevant in a damages
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`analysis.
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`Indeed, Realtek previously had no objection to producing its distributor contracts. But
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`once ParkerVision requested the underlying distributor reports and exchanges of information that
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`account for accused Realtek chips imported and/or sold into the U.S., Realtek refused to provide
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`any further agreements and any distributor reports. But Realtek may not “open the door” to
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`ParkerVision’s access to Realtek’s sales and/or importation operations then unliterally refuse to
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`complete its production once ParkerVision identifies foreign conduct that has a direct causal
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`relationship to infringing Realtek chips sales and/or importation in the U.S. Brumfield, 97 F.4th
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`at 878.
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`ParkerVision is entitled to all Realtek distributor contracts and underlying reports to
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`determine the relationship between Realtek and its distributors and the quantity of Realtek chips
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`sold into and/or incorporated into a third-party product for sale/importation into the United
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`States. Arguments regarding whether such foreign conduct may be plausibly included in a
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`damages figure is reserved for dispositive/Daubert motion practice. But at this stage,
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`ParkerVision is entitled to develop the evidence and discover facts that are relevant to the
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`damages issues in this case.
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`REALTEK’S POSITION
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`As to distributor agreements, Realtek is baffled. At multiple meet and confers, Realtek
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`confirmed repeatedly that it produced all agreements for all of its distributors from 2016-2024.
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`Specifically, Realtek produced agreements for 18 distributors, totaling over 80 agreements.
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`Realtek is not withholding any distributor agreements, and there is nothing further to produce.
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`As to distributor reports, ParkerVision cannot articulate any theory under which they are
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`relevant. Specifically, ParkerVision can only capture, at most, direct U.S. sales by Realtek (a
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`foreign company) because ParkerVision cannot assert indirect infringement in this case. See also
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`Dkt. 56 (ParkerVision’s Reply to Realtek’s Motion to Dismiss) at 11 (“ParkerVision does not
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`allege indirect infringement”). As a matter of law, ParkerVision cannot tie Realtek’s
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`distributor’s sales to any domestic action by Realtek. “Mere knowledge that a product sold
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`overseas will ultimately be imported into the United States is insufficient to establish liability
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`under section 271(a).” MEMC Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp.,
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`420 F.3d 1369, 1377 (Fed. Cir. 2005).
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`As the Federal Circuit recently confirmed, ParkerVision must provide a “focused,
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`coherent explanation of the required causal connection to domestic infringement.” Brumfield v.
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`IBG, LLC, 97 F.4th 854, 880 (Fed. Cir. 2024) (affirming district court’s exclusion of worldwide
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`sales under the WesternGeco framework because the damages theory “is legally insufficient . . .
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`[since] it does not start from an act of ‘infringement’”). Setting aside the fact that ParkerVision
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`only asserted method claims for the ’706 and ’518 Patents (and therefore, there is no direct
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`infringement), the only potential domestic infringement by Realtek are direct U.S. sales.
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`Indeed, ParkerVision’s own case citation confirms this. “[T]erritoriality is satisfied when
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`and only when any one of those domestic actions for that unit (e.g., sale) is proved to be
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`present.” Carnegie Mellon Univ. v. Marvell Tech. Group, Ltd., 807 F.3d 1283, 1306 (Fed. Cir.
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`2015). Here, no such domestic action is present for Realtek’s foreign sales.
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`“The royalty base for reasonable royalty damages cannot include activities that do not
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`constitute patent infringement.” AstraZenaca AB v. Apotex Corp., 782 F.3d 1324, 1344 (Fed.
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`Cir. 2015). ParkerVision is not entitled to Realtek’s foreign sales under any theory. Nor has
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`ParkerVision even articulated one. ParkerVision complains that Realtek “opened the door” to
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`the production of foreign sales documents. But by producing its distributor agreements, Realtek
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`did not somehow waive its argument that ParkerVision is not entitled to foreign sales. Rather the
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`distributor agreements confirm that Realtek does not generally sell directly to the U.S.
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`Because ParkerVision has failed to make a sufficient showing that it would be entitled to
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`Realtek’s foreign sales, ParkerVision is not entitled to Realtek’s foreign sales documents,
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`including its distributors reports. Bel Power Soultions Inc. v. Monolithic Power Systems, Inc.,
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`No. 6:21-cv-00655-ADA, Dkt. 63 at 5 (W.D. Tex. July 26, 2022) (“[Plaintiff] has not yet made a
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`sufficient showing that it would be entitled to any damages based on [defendant’s] foreign sales,
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`so [defendant] need not produce its foreign sales data.”).
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`FINANCIAL DOCUMENTS
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`PARKERVISION’S POSITION
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`In response to ParkerVision’s multiple requests for production, Realtek’s entire document
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`production related to damages consists of approximately 43,000 purchase orders and packing
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`lists (in a foreign language), a handful of publicly available financial statements, a single
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`licensing agreement, and approximately seven distributor agreements. Realtek has unilaterally
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`decided that its document production is over. But that is not how fact discovery works.
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`Request No. 15 requires “[a]ny and all documents related to the marketing, promotion,
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`and advertising of Realtek Chips and/or Realtek Products.” Documents related to marketing and
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`advertising are directly encompassed by the Georgia Pacific factors and ParkerVision’s
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`apportionment theory. Realtek refuses to produce such documents.
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`Request No. 23 requires “[d]ocuments sufficient to show the gross profit, net profit, and
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`costs for each Realtek Chip and/or Realtek Product by generation, version and year including,
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`without limitation, documents sufficient to fully describe Realtek’s costs for each of the Realtek
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`Chips . . . by generation, version and year.” Realtek has produced a single Excel file that
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`supposedly delineates all Realtek chips sales internationally during the damages period. But this
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`file does not include gross profit, net profit, and costs for each Realtek Chip, nor by generation,
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`version and year. Such information is directly applicable to a damages theory and is otherwise
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`encompassed by the Georgia Pacific factors. Realtek refuses to produce such documents.
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`Request No. 32 requires “[i]ndustry and competitive analyses including, without
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`limitation, documents that identify, evaluate or analyze competitors in the marketplace for each
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`Realtek Chip.” Realtek’s internal industry and competitive analyses and market share analyses
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`are directly encompassed by the Georgia Pacific factors and ParkerVision’s apportionment and
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`royalty rate theory. Further, each Realtek distributor agreement requires the distributor to
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`provide reporting information including chip sale market conditions, market trends, projected
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`demand, sales plans, customer lists, status of promoting new products, and customer comments
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`regarding quality of Realtek chips. See Ex. 3 at § § 5.1.10, 5.1.12, 7.1, 7.2, and 7.7. Thus,
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`ParkerVision is entitled to documents regarding Realtek’s internal industry and competitive
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`analyses and Realtek’s distributors’ reports on market conditions, market trends, etc. Realtek
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`refuses to produce such documents.
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`Request No. 34 requires “documents relating to market research, customer surveys, or
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`internal studies related to the desired attributes of each Realtek Chip.” Again, Realtek’s market
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`research and internal studies are directly encompassed by the Georgia Pacific factors and
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`ParkerVision’s apportionment and royalty rate theory. Realtek refuses to provide these
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`documents.
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`Realtek may not unilaterally decide which document requests it will comply with and
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`when its document production begins and ends. Realtek’s continuous failure to produce
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`damages-related documents prejudices ParkerVision’s ability to develop its damages case,
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`particularly under the current scheduling order where Realtek is trying to delay and “run out the
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`clock” on discovery.
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`REALTEK’S POSITION
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`The requested discovery is not proportional to the needs of the case and the issues at
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`stake. In fact, this case makes no sense given its low value.
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`On June 5, the Federal Circuit summarily affirmed the PTAB final written decision
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`finding all challenged claims of the ’835 Patent unpatentable. Ex. 1. Consequently,
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`ParkerVision is collaterally estopped from litigating the asserted claims of the ’835 Patent.
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`With the elimination of the ’835 Patent, the damages window reduces dramatically from
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`nine years to less than two years: November 10, 2016 to October 21, 2018. More critically,
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`during the damages window, Realtek’s direct sales to the U.S. totaled only $194,193.
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`Realtek has produced its worldwide sales numbers, distributors agreements, and shipment
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`documents in an effort to provide documents to ParkerVision so that it can confirm Realtek’s
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`low direct U.S. sales numbers, and Realtek’s limited domestic actions. Yet ParkerVision refuses
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`to drop this case.
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`As Realtek discussed in its motion to dismiss, ParkerVision only filed this case because it
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`failed to diligently litigate its case against TCL and LG. Dkt. 54 at 1. But in filing this case,
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`ParkerVision failed to perform an adequate pre-suit investigation which would have uncovered
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`that Realtek has limited actions in the U.S. to allege direct infringement.
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`The scope of this case is narrow, and the cost of further discovery in this case will almost
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`certainly exceed any possible damages award. Even before the ’835 Patent dropped out of the
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`case, ParkerVision confirmed in a separate dispute that a simple search for draft licenses is “not
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`proportional to the needs of the case and the issues at stake.” Ex. 2. Indeed, ParkerVision has
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`failed to produce the same marketing, business plans, sales projections, competitor analysis, and
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`other financial documents in response to Realtek’s similar requests for production, and refuses to
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`confirm whether or not it will.
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`The Court should reject ParkerVision’s efforts to drive up the costs for Realtek without a
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`reciprocal production from ParkerVision.
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`CONCLUSION
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`The Court, upon consideration of the parties’ respective requests, is of the opinion that
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`Realtek must produce distribution agreements and underlying documents in response to Request
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`for Production Nos. 11, 16, 17, 27, 39, 44, 49, 50, 51, 52, and 53. Additionally, Realtek must
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`produce marketing, business plans, sales projections, competitor analysis, and other financial
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`documents in response to Request for Production Nos. 15, 23, 32, and 34. Accordingly,
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`ParkerVision’s requests are GRANTED.
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`SIGNED this 11th day of June, 2024.
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