Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 1 of 20 PageID# 11656
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`RAI STRATEGIC HOLDINGS, INC. AND R.J.
`REYNOLDS VAPOR COMPANY
`
`
`Plaintiffs and
`Counterclaim Defendants,
`
`
`v.
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.
`
`
`Defendants and
`Counterclaim Plaintiffs.
`
`Case No. 1:20-cv-00393-LO-TCB
`
`
`
`
`
`
`
`
`COUNTERCLAIM PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION TO
`COMPEL REYNOLDS’ 30(b)(6) DEPOSITION ON TOPICS 28, 54, AND 78
`
`
`
`
`
`

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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 2 of 20 PageID# 11657
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`TABLE OF CONTENTS
`
`
`
`Page
`
`I.
`
`INTRODUCTION ...............................................................................................................1
`
`II.
`
`FACTUAL BACKGROUND ..............................................................................................3
`
`A.
`B.
`
`C.
`
`D.
`
`Counterclaim Plaintiffs’ 30(b)(6) Deposition Notices .............................................3
`Reynolds’ Witness On Topic 28 Was Unprepared To Testify About The
` .....................................................................3
`Reynolds’ Damages Expert Relies On Information From Mr. Gilley To
`Support His Reasonable Royalty Opinions..............................................................4
`Reynolds’ Refusal To Provide Witnesses For Topics 54 And 78 ...........................5
`
`III.
`
`LEGAL STANDARDS .......................................................................................................6
`
`IV.
`
`ARGUMENT .......................................................................................................................7
`
`A.
`
`B.
`
`C.
`
`D.
`
`Reynolds Must Designate A Corporate Witness For Topic 28 (The
`) ....................................................................7
`Reynolds Must Make Mr. Gilley Available For A Deposition On His
`Conversation With Dr. Sullivan .............................................................................10
`Reynolds Must Designate A Corporate Witness For Topic 54 (Non-
`Infringing Alternatives For The ’556 Patent) ........................................................11
`Reynolds Must Designate A Corporate Witness For Topic 78 (
`
`) .....................................................14
`
`V.
`
`CONCLUSION ..................................................................................................................15
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 3 of 20 PageID# 11658
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`ASUS Computer Int’l v. Round Rock Research, LLC,
`No. 12-cv-2099, 2014 WL 1463609 (N.D. Cal. Apr. 11, 2014) ..............................................10
`
`Georgia-Pacific Corp. v. United States Plywood Corp.,
`318 F. Supp. 1116 (S.D.N.Y. 1970).........................................................................................14
`
`Helios Software, LLC v. SpectorSoft Corp.,
`No. 12-cv-81, 2014 WL 3611321 (D. Del. July 18, 2014) ......................................................10
`
`Humanscale Corp. V. CompX Int’l, Inc.,
`No. 09-cv-86, 2009 WL 5091648 (E.D. Va. Dec. 24, 2009) ...................................................10
`
`Jim Satcher, Inc. v. Santander Consumer USA, Inc.,
`No. 15-cv-4756, 2016 WL 11608377 (D.S.C. Nov. 18, 2016) ..................................................6
`
`Loboa v. Women’s Health Alliance, P.A.,
`No. 5:18-cv-329-FL, 2020 WL 889739 (E.D.N.C. Feb. 24, 2020) ...........................................6
`
`Marker v. Union Fid. Life Ins. Co.,
`125 F.R.D. 121 (M.D.N.C. 1989) ..............................................................................................6
`
`MP NexLevel, Ltd. Liab. Co. v. Codale Elec. Supply, Inc.,
`No. 08-cv-727, 2012 WL 2368138 (D. Utah June 20, 2012) ..................................................12
`
`NewMarket Corp. v. Innospec Inc.,
`No. 10-cv-503, 2011 WL 1306008 (E.D. Va. Apr. 1, 2011) ...............................................7, 10
`
`United States v. Taylor,
`166 F.R.D. 356 (M.D.N.C. 1996) ..............................................................................................7
`
`
`
`
`
`ii
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 4 of 20 PageID# 11659
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`I.
`
`INTRODUCTION
`
`Fact discovery in this case closes in ten days. Yet Counterclaim Defendant R.J. Reynolds
`
`Vapor Company (“Reynolds” or “RJRV”) refuses to provide witnesses on several 30(b)(6)
`
`deposition topics—topics outstanding since October and November 2020—seeking undisputedly
`
`discoverable and relevant information. Reynolds’ continued stone-walling on facially relevant
`
`discovery must stop, and the Court should compel Reynolds to provide the requested testimony.
`
`First, Reynolds should be compelled to provide a fully prepared witness on Topic 28
`
`directed to
`
`. Reynolds produced Mr. Nicholas Gilley to
`
`testify on this topic, but Mr. Gilley was indisputably unprepared to testify on the full scope of the
`
`topic. He had no personal knowledge of
`
`,
`
`and instead
`
`
`
`
`
` Ex. 1
`
`(Gilley Dep.) at 214:5-217:2. Mr. Gilley was unable to testify, for example, about Reynolds’
`
`analyses and assessment of the consideration, any internal communications or communications
`
`with
`
`, or negotiations leading to the agreement. Counterclaim Plaintiffs are entitled to a
`
`fully prepared witness on the
`
`,
`
`
`
`.
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`Second, Reynolds must also make Mr. Gilley available for a one-hour personal fact
`
`deposition on the subject matter of his discussion with Reynolds’ damages expert, which occurred
`
`months after Mr. Gilley’s December 2020 deposition. During that conversation, Mr. Gilley
`
`provided information about
`
`
`
` Ex. 2 (Sullivan
`
`Rbt. Rpt.) at Attachment 8. However, until Reynolds served its rebuttal damages expert report on
`
`March 23, 2021, Reynolds provided no information about, or notice to Counterclaim Plaintiffs, on
`
`1
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 5 of 20 PageID# 11660
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` Counterclaim Plaintiffs should be able to explore Mr. Gilley’s knowledge on
`
`, which did not become a disputed issue until months after his
`
`initial deposition.
`
`Third, Reynolds must provide a witness on Topic 54 directed at non-infringing alternatives
`
`for the ’556 patent. Reynolds’ technical expert, Mr. Kodama, contends
`
`
`
`
`
`
`
`. Reynolds, however, refuses
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`to provide a corporate designee on Reynolds’ knowledge of the features its expert contends are
`
`“comparable.” Counterclaim Plaintiffs are entitled to explore fully Reynolds’ corporate
`
`knowledge of the facts pertaining to Reynolds’ own products that underlie the factual
`
`underpinnings of Mr. Kodama’s assertions regarding non-infringing alternatives.
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`Fourth, Reynolds must provide a witness on Topic 78, which relates to Reynolds’
`
` Counterclaim Plaintiffs contend—and Reynolds disputes—
`
`
`
`
`
`
`
`
`
`, and
`
`are therefore relevant to damages, validity (secondary considerations of nonobviousness), and
`
`willfulness. Reynolds produced documents—which both parties’ experts rely on—showing that
`
`to produce a witness to testify about its knowledge of
`
`. Reynolds cannot refuse to
`
`provide a witness on this topic, which covers its own documents and is undisputedly relevant to
`
`multiple important issues in this case.
`
` but Reynolds refuses
`
`
`
`1 Nu Mark is a former e-vapor operating company of Altria Group, Inc., the parent company of
`Counterclaim Plaintiffs Philip Morris USA Inc. and Altria Client Services LLC.
`
`2
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 6 of 20 PageID# 11661
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`II.
`
`FACTUAL BACKGROUND
`
`A.
`
`Counterclaim Plaintiffs’ 30(b)(6) Deposition Notices
`
`On October 20, 2020, Counterclaim Plaintiffs served a 30(b)(6) deposition notice on
`
`Reynolds. In that notice, Counterclaim Plaintiffs included the following Topics:
`
` Topic 28: “Any settlements, licenses, or patent acquisitions executed by [Reynolds]
`covering patents or patent applications related to e-cigarette technology, including …
`
`
`.” Ex. 3 (10/20/21 30(b)(6) Notice) at 12.
`
` Topic 54: “Non-infringing alternatives to the inventions in the Counterclaim Asserted
`Patents, including but not limited to the costs of implementing such alternative
`technologies, any known advantages and drawbacks to those technologies, when any
`such alternative would be available to Plaintiffs, the acceptability of any such
`alternatives, and Your current plans to implement any such alternatives.” Id. at 17.
`
`On November 23, 2020, Counterclaim Plaintiffs served a second 30(b)(6) deposition notice
`
`on Reynolds based on Reynolds’ subsequent production of
`
`. That notice
`
`included Topic 78:
`
` Topic 78: “[Reynolds’] knowledge of any
`
`” Ex. 4 (11/23/20 30(b)(6) Notice) at 7.
`
`
`
`
`B.
`
`Reynolds’ Witness On Topic 28 Was Unprepared To Testify About The
`
`
`Before the case was stayed, Counterclaim Plaintiffs deposed Reynolds’ corporate designee,
`
`Nicholas Gilley, on Topic 28. Ex. 1 (Gilley Dep.) at 10:21-11:17. But Mr. Gilley testified that he
`
`had no personal knowledge of
`
`, and was woefully
`
`unprepared to testify regarding the agreement or its background. Mr. Gilley admitted that he
`
` of the agreement, and only
`
` Id. at 214:5-217:2. And
`
`
`
`
`
`
`
` Id. at 214:5-217:2; see also, e.g., id. at 215:24-
`
`3
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 7 of 20 PageID# 11662
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`216:2 (testifying that
`
`
`
`). In short, Mr. Gilley was wholly
`
`unprepared to testify about
`
`, and was therefore unable to
`
`testify about any information Reynolds considered when determining the consideration, any
`
`communications with
`
`, and negotiations leading to the agreement. He
`
`
`
` and was unable to testify about the information reasonably available to Reynolds,
`
`the corporate entity.
`
`Counterclaim Plaintiffs objected to Mr. Gilley’s lack of preparation on the record (id. at
`
`279:7-24) and, after the deposition, promptly asked Reynolds to produce a witness prepared to
`
`testify on
`
`. Ex. 5 (12/8/20 Email from D. McNeely). Shortly
`
`thereafter, the case was temporarily stayed. Dkt. 432. Counterclaim Plaintiffs again requested a
`
`fully-prepared witness after the Court lifted the stay on February 16. Ex. 6 (2/26/21 Ltr. from
`
`Koh) at 1. After the Parties met and conferred, Counterclaim Plaintiffs renewed their request for
`
`a “fully-prepared witness on Topic 28,” but Reynolds refused. Ex. 7 (3/30/21 Email from Koh).
`
`Reynolds’ refusal is particularly unreasonable because, as discussed below, Reynolds’ damages
`
`expert
`
`with Mr. Gilley—
`
`—supported by after-the-fact discussions
`
`.
`
`C.
`
`Reynolds’ Damages Expert Relies On Information From Mr. Gilley To
`Support His Reasonable Royalty Opinions
`
`While discussions regarding Counterclaim Plaintiffs’ request for a prepared witness on
`
`Topic 28 were ongoing, the parties served opening expert reports on February 24, 2021. In his
`
`expert report, Counterclaim Plaintiffs’ damages expert, Paul Meyer, relies on
`
`
`
`
`
`
`
`for three of the five asserted patents. See, e.g., Ex. 8 (Meyer Rpt.) ¶ 25. In his March 24 rebuttal
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`4
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 8 of 20 PageID# 11663
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`report, Reynolds’ damages expert, Ryan Sullivan, agrees with Mr. Meyer that
`
`
`
`2 Ex. 2 (Sullivan
`
`Rbt. Rpt.) ¶ 263. However, to arrive at his royalty rate, Dr. Sullivan calculated
`
`
`
`
`
`
`
` derived from a document and a March 23, 2021 conversation with Nick Gilley. Id.
`
`¶¶ 12, 265, Attachment A-8. According to Dr. Sullivan, Mr. Gilley told him
`
`
`
`
`
` Id. at Attachment A-8.
`
`In connection with seeking a prepared witness on Topic 28, Counterclaim Plaintiffs asked
`
`Reynolds to make Mr. Gilley available for deposition on his newly-disclosed conversation with
`
`Dr. Sullivan. Ex. 7 (3/30/21 Email from Koh); Ex. 9 (4/1/21 Email from Koh). Again, Reynolds
`
`refused.
`
`D.
`
`Reynolds’ Refusal To Provide Witnesses For Topics 54 And 78
`
`In February 2021, after the stay was lifted in this case, Counterclaim Plaintiffs diligently
`
`sought to schedule depositions for the remaining 30(b)(6) topics of Reynolds. Ex. 6 (2/26/21 Koh
`
`Letter). The parties met and conferred on March 3 and continued to negotiate the remaining topics.
`
`Reynolds has refused to designate a corporate designee to provide factual testimony about (i) its
`
`alleged non-infringing alternatives to the Vibe for the asserted ’556 patent (Topic 54), or
`
`(ii)
`
`
`
` (Topic 78). Reynolds contends that its experts will be opining on both of
`
`
`
`2 Dr. Sullivan opines that
`
`
`
`.
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 9 of 20 PageID# 11664
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`these issues, and seeks to designate its experts as its designees for these topics. Yet Reynolds
`
`refuses to provide a corporate Rule 30(b)(6) designee fact witness to testify about the factual
`
`underpinnings of these topics. Exs. 10-11 (4/7/21 Email from Smith; 4/7/21 Email from Koh).
`
`Counterclaim Plaintiffs are entitled to a corporate designee to testify about facts within Reynolds’
`
`corporate knowledge concerning these topics—not just Reynolds’ experts’ opinions based upon
`
`the selective facts considered by its experts in reaching their post-litigation conclusions.
`
`Moreover, any such testimony from Reynolds’ experts (even if such experts were fully informed
`
`of all facts reasonably within the corporate knowledge on such topics) would be improper as not
`
`properly and fully disclosed in Reynolds’ experts’ reports and would come too late for
`
`consideration by Counterclaim Plaintiffs’ experts. FED. R. CIV. P. 26(a)(2).
`
`The parties met and conferred again on April 7 on all of the above issues, and were unable
`
`to reach agreement.
`
`III. LEGAL STANDARDS
`
`Federal Rule of Civil Procedure 30(b)(6) requires corporate parties to identify and
`
`adequately prepare designees to provide “information known or reasonably available to the
`
`organization.” FED. R. CIV. P. 30(b)(6); see also Marker v. Union Fid. Life Ins. Co., 125 F.R.D.
`
`121, 126 (M.D.N.C. 1989). A corporate party must make “‘a conscientious, good-faith effort to
`
`designate knowledgeable persons for Rule 30(b)(6) depositions and to prepare them to fully and
`
`unevasively answer questions about the designated subject matter.’” Loboa v. Women’s Health
`
`Alliance, P.A., No. 5:18-cv-329-FL, 2020 WL 889739, at *2 (E.D.N.C. Feb. 24, 2020) (citations
`
`omitted). “‘[W]here unanswered information is significant enough, the 30(b)(6) deposition may
`
`have to be reconvened, possibly with a new witness.’” Jim Satcher, Inc. v. Santander Consumer
`
`USA, Inc., No. 15-cv-4756, 2016 WL 11608377, at *1 (D.S.C. Nov. 18, 2016) (citation omitted).
`
`6
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 10 of 20 PageID# 11665
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`Indeed, “[p]roducing an unprepared witness is tantamount to a failure to appear.” United States v.
`
`Taylor, 166 F.R.D. 356, 362 (M.D.N.C. 1996).
`
`A Rule 37 motion to compel is appropriate when a corporate party fails to designate a
`
`witness under Rule 30(b)(6), “or presents an unprepared, unknowledgeable designee.” NewMarket
`
`Corp. v. Innospec Inc., No. 10-cv-503, 2011 WL 1306008, at *6 (E.D. Va. Apr. 1, 2011). The
`
`Court may order an additional deposition of a fact witness where, as here, a party withholds
`
`information that prevents full exploration of discoverable facts.
`
`IV. ARGUMENT
`
`A.
`
`Reynolds Must Designate A Corporate Witness For Topic 28 (The
`)
`
`The Court should compel Reynolds to produce a fully-prepared witness on Topic 28 as it
`
`relates to the
`
`. The
`
`undisputedly relevant; both parties’ damages experts
`
` is
`
`
`
` And, as discussed below, there can be no credible dispute that Reynolds’
`
`corporate designee, Nick Gilley, was unprepared to testify about this significant agreement.
`
`As an initial matter, Mr. Gilley testified he lacked personal knowledge of this agreement,
`
`and, surprisingly,
`
` Ex. 1 (Gilley Dep.) at 212:10-13, 217:22-25. Instead,
`
`Mr. Gilley
`
`
`
`
`
`admitted he did not
`
`
`
`.” Id. at 214:5-217:2. Mr. Gilley expressly
`
` Id. at 215:24-216:2. Thus, he was unable
`
`to testify about even basic facts regarding the negotiations and agreement, as evidenced by the
`
`following exemplary testimony:
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 11 of 20 PageID# 11666
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`Id. at 220:8-221:22; see also, e.g., id. at 221:18-223:22 (testifying
`
`
`
`
`
`). Reynolds should not be permitted to thwart
`
`Counterclaim Plaintiffs’ legitimate discovery efforts by designating a grossly unprepared witness
`
`on facts underlying and leading up to the agreement, and instead preparing him to parrot litigation
`
`counsel’s position. Such conduct is particularly inappropriate where, as here, Reynolds’ own
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 12 of 20 PageID# 11667
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`damages expert
`
`
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`Topic 28 extends well beyond “
`
`.
`
`
`
`
`
`” (id. at 215:24-216:2), which is the only information that
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`Mr. Gilley was prepared to provide, and even then only superficially. Counterclaim Plaintiffs are
`
`entitled to a properly prepared witness who can address the full extent of the considerations,
`
`communications, and negotiations underlying this substantial settlement. That witness should not
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`only be informed and prepared fully with regard to the terms of the agreement, but also with regard
`
`to the patent and technical considerations underlying the agreement, the non-privileged financial
`
`and business considerations leading up to the agreement, and the non-privileged internal
`
`communications and the external communications underlying and leading up to the agreement,
`
`including the negotiations between the parties. Such designated witness should be required to
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`confer with those at the company involved in such considerations, negotiations, and
`
`communications, and should be familiarized with the underlying documents regarding such
`
`considerations, negotiations and communications within the possession, custody, or control of the
`
`company. Most certainly, putting up a witness who never read the agreement and apparently never
`
`considered any of the underlying considerations or communications does not suffice.
`
`Reynolds does not argue that Topic 28 seeks irrelevant information. Nor could it. Instead,
`
`Reynolds strangely contends it need not produce a prepared witness because
`
`
`
` Ex. 12 (4/6/21 Email from Vitt).
`
`Reynolds is wrong for two independent reasons. First, Counterclaim Plaintiffs’ expert relies on
`
`much more than
`
`. See, e.g., Ex. 8 (Meyer Rpt.) ¶¶ 199-202,
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`213-20. But, regardless, it is nonsensical to fault Counterclaim Plaintiffs’ expert for failing to
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 13 of 20 PageID# 11668
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`discuss or rely on the very kind of information that Reynolds has steadfastly refused to provide
`
`through a properly prepared witness. Second, whether the damages experts only relied on
`
`
`
` is irrelevant because fact discovery remains open. Dkts. 534, 545. Reynolds cannot block
`
`undisputedly relevant fact discovery, and the Court should compel Reynolds to produce a witness
`
`prepared to testify about the full scope of Topic 28. See, e.g., NewMarket Corp., 2011 WL
`
`1306008, at *5-6; Humanscale Corp. V. CompX Int’l, Inc., No. 09-cv-86, 2009 WL 5091648, at
`
`*5 (E.D. Va. Dec. 24, 2009).
`
`B.
`
`Reynolds Must Make Mr. Gilley Available For A Deposition On His
`Conversation With Dr. Sullivan
`
`The Court should separately compel Reynolds to make Mr. Gilley available for a
`
`reasonably limited (one-hour) deposition on the subject matter of his discussion with Reynolds’
`
`damages expert, Dr. Sullivan. During that conversation, Mr. Gilley provided information about
`
`is
`
`” which
`
`
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` Ex. 2 (Sullivan Rbt. Rpt.) at Attachments A-8, D-4. Putting
`
`aside that Reynolds produced only one other document
`
`
`
` Reynolds should not be permitted to rely on self-serving facts spoon-fed to its expert
`
`without providing Counterclaim Plaintiffs an opportunity to explore the basis for such factual input
`
`so that they can prepare for cross-examination. See ASUS Computer Int’l v. Round Rock Research,
`
`LLC, No. 12-cv-2099, 2014 WL 1463609, at *11 (N.D. Cal. Apr. 11, 2014) (ordering two-hour
`
`supplemental deposition of witness who, after first deposition, had discussion with damages expert
`
`related to “factors [] consider[ed] when entering into patent license agreements”); Helios Software,
`
`LLC v. SpectorSoft Corp., No. 12-cv-81, 2014 WL 3611321, at *2 (D. Del. July 18, 2014).
`
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 14 of 20 PageID# 11669
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`Reynolds does not argue that the information sought is irrelevant. It cannot—the
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`information Mr. Gilley provided
`
`
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` Instead, Reynolds refuses to make Mr. Gilley available because he allegedly
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`“could have been questioned about [it] during the first deposition.” Ex. 12 (4/6/21 Email from
`
`Vitt). Given the timing, it is hard to credit that as a good faith argument by Reynolds. The subject
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`conversation did not occur until March 23—over three months after Mr. Gilley was deposed.3
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`Supra at 4-5. And Reynolds never identified the document Mr. Gilley and Dr. Sullivan discussed
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`in an interrogatory response or otherwise. Simply put, Reynolds failed to put Counterclaim
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`Plaintiffs on notice to examine Mr. Gilley on this document (one of over 200,000 documents
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`Reynolds has produced). Reynolds damages contentions preceding Mr. Gilley’s prior deposition
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`include no reference to
`
` let alone provide any underlying analysis or
`
`assumptions relating to
`
`. At a minimum,
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`fundamental fairness dictates that Reynolds be compelled to make Mr. Gilley available for a one-
`
`hour deposition on the subject matter of his conversation with Dr. Sullivan.
`
`C.
`
`Reynolds Must Designate A Corporate Witness For Topic 54 (Non-Infringing
`Alternatives For The ’556 Patent)
`
`Reynolds refuses to provide a witness on Topic 54, which covers, among other things,
`
`“[n]on-infringing alternatives to the inventions in the Counterclaim Asserted Patents.” The Court
`
`should compel Reynolds to produce a witness on Topic 54 with respect to the ’556 patent.
`
`Topic 54 pertains to Reynolds’ contention that
`
`
`
`that
`
`
`
`. Reynolds’ technical expert, Mr. Kodama, opines
`
`
`
`3 And the day before Reynolds served rebuttal expert reports, and a month after Counterclaim
`Plaintiffs served opening expert reports.
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 15 of 20 PageID# 11670
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`.” Ex. 13 (Kodama ’556 Rbt. Rpt.) ¶ 115. To support his opinion, Mr. Kodama
`
`contends that
`
` (i)
`
` (ii)
`
` (iii)
`
`
`
`
`
`
`
`
`
`i.e., facts pertaining to
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`why
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` allegedly is a non-infringing alternative to the accused Vibe product. Id. ¶¶ 112-15.
`
`Because Reynolds’ expert reaches his conclusions about
`
` as an alleged non-infringing
`
`alternative based on facts about
`
`, Counterclaim Plaintiffs are entitled to explore fully
`
`Reynolds’ corporate knowledge about those facts pursuant to Topic 54.
`
`Reynolds’ offer to somehow designate Mr. Kodama’s upcoming expert testimony as a
`
`substitute to properly designating a corporate representative to provide fact testimony on Topic 54
`
`fails. First, Reynolds’ offer confirms the relevance of Topic 54. Second, Mr. Kodama’s expert
`
`testimony about
`
` as a non-infringing alternative cannot properly substitute for factual
`
`testimony about Reynolds’ corporate knowledge about aspects of the
`
` underlying Mr.
`
`Kodama’s opinions. The selective facts that Mr. Kodama relies on are not coextensive with
`
`Reynolds’ corporate knowledge about
`
` as a potentially non-infringing alternative to Vibe,
`
`which can only be elicited during a corporate deposition on Topic 54. See, e.g., MP NexLevel,
`
`Ltd. Liab. Co. v. Codale Elec. Supply, Inc., No. 08-cv-727, 2012 WL 2368138, at *2 (D. Utah June
`
`20, 2012) (“[F]ailure to provide a prepared Rule 30(b)(6) witness is not excused by provision of
`
`an expert witness, because expert testimony is not a sufficient substitute for the testimony of a
`
`corporate representative.”). Third, Reynolds’ position leads to the untenable conclusion that
`
`litigants can avoid designating corporate witnesses to testify about the company’s knowledge of
`
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 16 of 20 PageID# 11671
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`relevant facts by designating its experts to testify about the selective facts they were made aware
`
`of instead. For example, a litigant could effectively avoid designating a corporate witness about
`
`company’s financials by designating its damages expert instead, and could shield relevant facts by
`
`simply failing to disclose them to its expert. This is contrary to Rule 30(b)(6), which requires
`
`Reynolds to provide “information known or reasonably available to the organization.” FED. R.
`
`CIV. P. 30(b)(6). Fourth, Mr. Kodama’s deposition will not occur before fact discovery closes,
`
`leaving Counterclaim Plaintiffs with no ability to use such testimony during the allotted time for
`
`fact discovery. Finally, any such additional factual testimony from Reynolds’ experts at this time
`
`is also improper as it was not properly and fully disclosed in Reynolds’ experts’ reports and would
`
`come too late for consideration by Counterclaim Plaintiffs’ experts. See FED. R. CIV. P. 26(a)(2).
`
`Reynolds also argues that “the only fact a corporate witness would know within the scope
`
`of this topic is what is provided in our interrogatory response:
`
`
`
`.” Ex. 14
`
`(4/8/21 Email from Smith). First, it is not credible that Reynolds has no corporate knowledge
`
`about the product features of the
`
`
`
`.” See supra at 11-12. In
`
`any event, even if Reynolds is disclaiming all corporate knowledge about
`
`’s features, i.e., facts
`
`underlying Mr. Kodama’s expert conclusions, Counterclaim Plaintiffs are entitled to confirm this
`
`with a 30(b)(6) deposition, and preclude Reynolds from introducing new or contrary facts at trial.
`
`Reynolds should be compelled to designate a witness on Topic 54 with respect to the ’556
`
`Patent.
`
`13
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 17 of 20 PageID# 11672
`
`D.
`
`Reynolds Must Designate A Corporate Witness For Topic 78 (
`)
`
`
`
`The Court should compel Reynolds to produce a witness on Topic 78, which seeks
`
`information on
`
`. Reynolds has produced documents showing that
`
`
`
`
`
`
`
` These documents include
`
` See, e.g., Exs. 15-18.
`
`Indeed, both Reynolds’ and Counterclaim Plaintiffs’ experts
`
` to opine on several
`
`issues in this case. See, e.g., Ex. 19 (McAlexander Op. Rpt.) ¶¶ 681-682; Ex. 20 (Blalock Rbt.
`
`Rpt.) ¶¶ 159-167. And, as explained below, it cannot be credibly disputed that Topic 78, which
`
`seeks Reynolds’ knowledge about
`
`, is relevant to at least three disputed issues in
`
`this case.
`
`First, Reynolds’ knowledge of
`
` is relevant to damages—in particular,
`
`Georgia Pacific Factors 8-10, which relates to the established profitability and success of products
`
`made under the patent, and the benefits to those who have used the invention. See Georgia-Pacific
`
`Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970). As
`
`Counterclaim Plaintiffs’ damages expert opined,
`
`
`
` further shows that the patented technology is “important and valuable.” Ex. 8 (Meyer
`
`Rpt.) ¶¶ 420-21. Second, Topic 78 is relevant to secondary considerations—such as commercial
`
`success and copying—for the same reasons. Ex. 19 (McAlexander Op. Rpt.) ¶¶ 681-82; Ex. 21
`
`(McAlexander Rbt. Rpt.) ¶¶ 500-01. Third, Reynolds’
`
` is relevant to willfulness, as Reynolds admits
`
`
`
`.
`
`
`
`
`
`14
`
`REDACTED
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`REDACTED
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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 18 of 20 PageID# 11673
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`In the face of the highly probative nature of this testimony, Reynolds has steadfastly
`
`refused to produce a witness to testify on any facts relating to
`
`
`
` Reynolds’ sole argument for blocking this discovery is that both parties’ experts
`
`purportedly agree
`
`, such that
`
`testimony on this topic is not necessary. But Reynolds’ argument cannot be squared with
`
`Reynolds’ own discovery responses, in which Reynolds refuses to agree unequivocally that these
`
`same products practice the ’545 Patent. See, e.g., Ex. 22 (3/29/21 Resp. to 3rd Set of RFAs) at 3
`
`(“
`
`.”); Ex. 23 (4/02/21 Resp. to 5th Set of RFAs) at 6 (“
`
`
`
`
`
`
`
`
`
`
`
`inconsistent positions aside, Counterclaim Plaintiffs are entitled to explore the factual knowledge
`
`regarding
`
`, and thus the Court should compel Reynolds to
`
`.”). Putting Reynolds’ (at best)
`
`produce a witness on Topic 78.
`
`V.
`
`CONCLUSION
`
`For the foregoing reasons, Counterclaim Plaintiffs respectfully request that the Court grant
`
`this Motion and compel Reynolds to (i) designate a corporate witness for Topics 28, 54, and 78,
`
`and (ii) make Mr. Gilley available for a one-hour deposition on his conversation with Dr. Sullivan,
`
`Reynolds’ damages expert.
`
`15
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`REDACTED
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`

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`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 19 of 20 PageID# 11674
`
`Dated: April 9, 2021
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`
`
`By: /s/ Maximilian A. Grant
`
`Maximilian A. Grant (VSB No. 91792)
`(max.grant@lw.com)
`Lawrence J. Gotts (VSB No. 25337)
`lawrence.gotts@lw.com
`Matthew J. Moore (pro hac vice)
`matthew.moore@lw.com
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Suite 1000
`Washington, DC 20004
`Telephone: (202) 637-2200
`Facsimile: (202) 637-2201
`
`Clement J. Naples (pro hac vice)
`clement.naples@lw.com
`LATHAM & WATKINS LLP
`885 Third Avenue
`New York, NY 10022-4834
`Tel: (212) 906-1200; Fax: (212) 751-4864
`
`Gregory J. Sobolski (pro hac vice)
`greg.sobolski@lw.com
`LATHAM & WATKINS LLP
`505 Montgomery Street, Suite 2000
`San Francisco, CA 94111
`Telephone: (415) 391-0600
`Facsimile: (415) 395-8095
`
`Brenda L. Danek (pro hac vice)
`brenda.danek@lw.com
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Tel: (312) 876-7700; Fax: (312) 993-9767
`
`Counsel for Defendants-Counterclaim Plaintiffs
`Altria Client Services LLC, Philip Morris USA
`Inc., and Philip Morris Products S.A.
`
`16
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 543 Filed 04/09/21 Page 20 of 20 PageID# 11675
`
`CERTIFICATE OF SERVICE
`
`
`
`I hereby certify that on this 9th day of April, 2021, a true and correct copy of the foregoing
`
`was served using the Court’s CM/ECF system, with electronic notification of such filing to all
`
`counsel of record:
`
`/s/ Maximilian A. Grant
`
`
`Maximilian A. Grant (VSB No. 91792)
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Suite 1000
`Washington, DC 20004
`Telephone: (202) 637-2200
`Facsimile: (202) 637-2201
`Email: max.grant@lw.com
`
`
`Counsel for Defendants-Counterclaim
`Plaintiffs Altria Client Services LLC, Philip
`Morris USA Inc., and Philip Morris
`Products S.A.
`
`17
`
`