Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 1 of 10
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`Plaintiff,
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`Defendants.
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`Plaintiff,
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`CIVIL ACTION NO. 6:19-CV-00384
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`JURY TRIAL DEMANDED
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`CIVIL ACTION NO. 6:19-CV-00385
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`CONSOLIDATED INTO
`CIVIL ACTION NO. 6:19-CV-00384
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`JURY TRIAL DEMANDED
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`ANCORA TECHNOLOGIES, INC.,
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`v.
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`LG ELECTRONICS INC. and LG
`ELECTRONICS U.S.A., INC.,
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`ANCORA TECHNOLOGIES, INC.,
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`v.
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`SAMSUNG ELECTRONICS CO., LTD. and
`SAMSUNG ELECTRONICS AMERICA,
`INC.,
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`Defendants.
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`JOINT MOTION FOR ENTRY OF SCHEDULING ORDER
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`On December 6, 2019, the Court conducted a conference in the above entitled and
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`numbered cases. Following that conference, Plaintiff Ancora Technologies, Inc., and Defendants
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`LG Electronics Inc., LG Electronics U.S.A., Inc., Samsung Electronics Co., Ltd. and Samsung
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`Electronics America, Inc. met and conferred and have reached agreement on all but the following
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`three Scheduling Order issues:
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`(1) the financial information Defendants will provide on February 3, 2020;
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`(2) the deadline by which each Defendant will identify any third party it reasonably
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`believes possesses exclusive information regarding the over-the-air updates and
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`related functionality identified in Plaintiff’s infringement contentions;
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 2 of 10
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`(3) the deadline by which Defendants shall produce information regarding the
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`identity and dates of any over-the-air updates released from June 21, 2013,
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`through October 1, 2018, and the number of times each update was downloaded.
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`Pursuant to ¶ 4 of the Court’s “Order Governing Proceedings – Patent Case,” the parties
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`briefly set forth below their respective positions on each of these items. The parties also attach
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`their respective proposed orders as Exhibit A (Plaintiff) and Exhibit B (Defendants). The parties
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`also attach as Exhibit C a redline document comparing the two proposed orders.
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`I.
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`Plaintiff’s Positions
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`1. Defendants Should Produce Profit and Cost Information by February 3, 2020
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`The parties’ dispute as to this issue is narrow. Defendants have agreed to produce by
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`February 3, 2020, quarterly sales information, including per-product revenue and units sold, for
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`the period of October 1, 2012, to October 1, 2018. The parties disagree only as to whether such
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`sales information also should include per-product profit and cost information.
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`Defendants should be ordered to produce such information for two reasons. First, such
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`information is relevant to calculating a reasonable royalty. Chembio Diagnostic Sys., Inc. v. Saliva
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`Diagnostic Sys., Inc., 236 F.R.D. 129, 139 (E.D.N.Y. 2006) (holding that party was “entitled to
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`the discovery sought concerning Chembio’s sales and costs (including manufacturing) in order to
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`enable SDS to prove damages,” including “the amount of a reasonable royalty”); Phase Four
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`Indus., Inc. v. Marathon Coach, Inc., 2006 WL 1465313, at *7 (N.D. Cal. May 24, 2006)
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`(“Documents related to the costs involved in sales of Waste Master products is relevant to an
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`evaluation of damages.”).
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`Second, Defendants have offered no explanation why producing such information now
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`would be unduly burdensome. Fractus, S.A. v. ZTE Corp., 2019 WL 2103698, at *3 (N.D. Tex.
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 3 of 10
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`May 14, 2019) (ordering Defendants to produce financials where “Defendants fail[ed] to provide
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`any actual evidence of what that burden may actually be”). Defendants have not claimed that such
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`information is stored in a system different from the one used to store product-specific quarterly
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`unit counts and revenue information—information that Defendants already will be collecting and
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`providing. Plaintiff’s expectation thus is that it would not require much, if any, additional work to
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`produce the requested per-product profit and cost information, including the costs of each good
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`sold.
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`2. Defendants Should Be Ordered to Identify Relevant Third Parties By
`February 3, 2020
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`The parties’ dispute as to this issue also is narrow: the parties have agreed that each
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`Defendant will identify any third party it reasonably believes possesses relevant information that
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`the Defendant does not possess regarding the accused “over-the-air” update functionality identified
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`in Plaintiff’s infringement contentions, including any third party that performs any step necessary
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`to download or install the accused over-the-air updates or that possesses source code related to
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`such download or installation. Plaintiff has asked Defendants to provide this information by
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`February 3, 2020. Defendants have countered that they will provide it by the first week of March.
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`The Court should order Defendants to provide this information by February 3, 2020. As
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`discussed at the December 6 hearing, obtaining discovery from third parties typically is a lengthy
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`process—particularly if source code is involved—and Plaintiff wants to ensure that it begins that
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`process as early as possible to ensure that there is no need to extend the Court’s desired trial
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`schedule. Further, Defendants have offered no reason why they cannot provide such basic
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`information—which Plaintiff began requesting in November—by February 3. Nor can they. To
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`the extent Defendants do not have this information readily available Defendants will have had
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`more than two full months to investigate and obtain it by the February 3 deadline.
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 4 of 10
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`3. Defendants Should Be Ordered to Produce Summary Information Regarding
`the Identity and Timing of the Accused Updates.
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`The parties’ final dispute concerns Plaintiff’s request that Defendants provide by March 6,
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`2020, information related to the accused “over the air” update functionality, including the identity
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`and date of each update released from June 21, 2013, through October 1, 2018, and the number of
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`times each update was downloaded.
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`As Plaintiff explained at the hearing, such information is relevant to the infringement of
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`the method claims Plaintiff has asserted against each Defendant. As a result, the requested
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`information should be produced by Defendants’ February 3, 2020 deadline to produce “technical
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`documents, including software where applicable, sufficient to show the operation of the accused
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`product(s).” As courtesy, however, Plaintiff has agreed to allow Defendants until March 6 to
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`produce this information.
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`Other than asserting that producing this information “would be significantly more
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`burdensome,” Defendants have provided no information as to why they should not be required to
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`produce this information by March 6. That is not enough to avoid production. See Order Governing
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`Proceedings – Patent Case, ¶ 5; see also Fractus, 2019 WL 2103698, at *3. Plaintiff thus asks the
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`Court to order Defendant to produce the requested information by March 6.
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`II.
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`Defendants’ Positions
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`1. Defendants Should Not Be Required to Produce Sales Information Beyond
`Quarterly Revenues and Units Sold.
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`The Court’s “Order Governing Proceedings – Patent Case” sets forth, as a default, that
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`Defendants shall produce “summary, annual sales information for the accused product(s) for the
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`prior two years, unless the parties agree to some other timeframe.” (D.I. 22 at 5). During the case
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`management conference, Plaintiff requested additional years of sales data, extending back more
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`than 6 years from the filing of the complaint to October 1, 2012. In the interest of compromise,
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 5 of 10
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`Defendants agreed to provide quarterly sales information, including per-product revenue and units
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`sold, for the period of October 1, 2012 to October 1, 2018—significantly more information than
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`what the default schedule requires. After the case management conference, Plaintiff now demands
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`additional per-product profit and cost information, despite the fact that quarterly revenue and unit
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`information is sufficient to value the case. Plaintiff has not articulated a reasonable basis for
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`requesting such highly sensitive information at this time.
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`Plaintiff essentially seeks to open fact discovery in February, despite the fact that the Court
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`has made a conscious decision to postpone discovery until after the Markman hearing in May. The
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`only basis that Plaintiff has provided for deviating from the Court’s default scheduling order is
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`that such information may be relevant to calculating a reasonable royalty. But such information
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`goes well beyond what is necessary for Plaintiff to assess the scope of the matters at this point. As
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`the cases Plaintiff cites make clear, the additional information that Plaintiff is requesting is more
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`relevant to the experts’ ultimate conclusions regarding damages, which will be addressed in fact
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`and expert discovery. See Chembio Diagnostic Sys., Inc., 236 F.R.D. at 138–39; Phase Four
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`Indus., Inc., 2006 WL 1465313, at *7. Defendants have not refused to produce profit and cost
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`information outright, but rather do not believe it is appropriate or necessary to provide such
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`information in conjunction with their invalidity contentions.
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`For the above reasons, Defendants request that the Court deny Plaintiff’s request.
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`2. The Identification of Third-Parties By March 6, 2020 Would Provide Ample
`Opportunity for Third-Party Discovery.
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`Plaintiff requested that Defendants provide an early identification of third-parties involved
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`in the accused over-the-air update processes, so as to ensure ample time for discovery. According
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`to the agreed terms of the Scheduling Order, fact discovery is set to begin on June 5, 2020. In an
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`attempt to accommodate Plaintiff’s request, Defendants have agreed to identify any third-parties
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 6 of 10
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`they reasonably believe possess relevant information, that the Defendants do not possess,
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`regarding the over-the-air updates as identified in Ancora’s infringement contentions, by March 6,
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`2020—three months before fact discovery is set to open.
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`Plaintiff now wants to expedite the request by an additional month, i.e., that the information
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`be provided by February 3, 2020 instead of March 6, 2020. Production of this information by
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`March 6, 2020 would allow Plaintiff eight months to conduct discovery (fact discovery is set to
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`close on November 13, 2020). Plaintiff’s request is burdensome as it requests information across
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`multiple platforms, i.e., smartphones, tablets, and TVs. Additionally, numerous U.S. and Korean
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`holidays fall between now and February 3, 2020, including Christmas, New Years, and the Korean
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`Lunar New Year. A March deadline would permit Defendants the necessary time to obtain the
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`requested information.
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`Accordingly, Defendants request that the Court set the deadline for third-party
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`identification for March 6, 2020.
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`3. As the Court Previously Recognized, Defendants Should Not Be Required to
`Produce Summary Information Regarding the Identity, Timing, and the
`Number of Downloads of the Accused Updates.
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`Plaintiff previously raised the issue of requiring summary information regarding the
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`identity, timing, and the number of downloads of the accused updates during the case management
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`conference. See Tr. at 13:9–25 (“[W]e have asked that defendants also identify for us . . . the
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`updates that were provided and the dates they were provided . . .”). Defendants had understood the
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`Court as denying Plaintiff’s request. Tr. at 16:11–25 (“My sense is that’s a little more robust than
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`what I want to do at this point and the plaintiffs just need to understand -- all the parties need to
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`understand that after the Markman you’ll be able to get this information if we get to that point
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`because you have not settled.”). But Plaintiff continues to demand the same information.
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 7 of 10
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`Importantly, Plaintiff has not identified how “such information is relevant to the
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`infringement of the method claims Plaintiff has asserted against each Defendant.” Plaintiff has not
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`shown how the identity, dates, and the number of downloads of the over-the-air updates relate back
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`to the steps of the asserted method claims. Per the Court’s default schedule, Defendants have
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`already agreed to provide technical documents sufficient to show the operation of the accused
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`products. This information will be sufficient for Plaintiff to verify its theories of infringement. It
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`is sufficient to understand how an accused product operates and not how often it receives an
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`update.
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`As Plaintiff recognizes, based on an initial investigation within a short period of time,
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`Defendants have notified Plaintiff that this request would present a significant burden, in particular
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`given the large number of devices that Plaintiff has accused across the two matters,1 as well the
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`more than five years of data that Plaintiff is requesting. To the extent that Defendants have the
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`requested information, it will require the non-trivial task of sifting through large amounts of data.
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`Plaintiff has again put the cart before the horse. As the Court recognized during the case
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`management conference, Plaintiff will have an opportunity to request this information as part of
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`fact discovery, should the case advance to that stage. Tr. at 16:11–25.
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`Accordingly, Defendants request that the Court deny Plaintiff’s request.
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`Dated: December 20, 2019
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`Respectfully submitted,
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`By: /s/ Charles L. Ainsworth
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`Charles L. Ainsworth (Texas 00783521)
`Robert Christopher Bunt (Texas 00787165)
`PARKER, BUNT & AINSWORTH, P.C.
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`1 Plaintiff has accused more than 150 Samsung devices of infringement, and more than 200 LG
`devices.
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 8 of 10
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`1000 East Ferguson, Suite 418
`Tyler, Texas 75702
`Tel: (903) 531-3535
`charley@pbatyler.com
`rcbunt@pbatyler.com
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`
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`Lexie G. White (Texas 24048876)
`SUSMAN GODFREY LLP
`1000 Louisiana Street, Suite 5100
`Houston, Texas 77002
`Tel: (713) 651-9366
`Fax: (713) 654-6666
`lwhite@susmangodfrey.com
`
`Andres Healy (pro hac vice)
`SUSMAN GODFREY LLP
`1201 Third Avenue, Suite 3800
`Seattle, Washington 98101
`Tel: (206) 516-3880
`Fax: 206-516-3883
`ahealy@susmangodfrey.com
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`Zachary B. Savage (pro hac vice)
`SUSMAN GODFREY LLP
`1301 Avenue of the Americas, 32nd Floor
`New York, New York 10019
`Tel: (212) 336-8330
`Fax: (212) 336-8340
`zsavage@susmangodfrey.com
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`COUNSEL FOR PLAINTIFF
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`/s/ Elizabeth M. Chiaviello (with permission)
`Winstol D. Carter, Jr.
`Texas Bar No. 03932950
`winn.carter@morganlewis.com
`Thomas R. Davis
`Texas Bar No. 24055384
`thomas.davis@morganlewis.com
`Elizabeth M. Chiaviello
`Texas Bar No. 24088913
`elizabeth.chiaviello@morganlewis.com
`MORGAN, LEWIS & BOCKIUS LLP
`1000 Louisiana Street, Suite 4000
`Houston, Texas 77002-5006
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 9 of 10
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`T. 713.890.5000
`F. 713.890.5001
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`Collin W. Park
`collin.park@morganlewis.com
`District of Columbia Bar No. 470486
`MORGAN, LEWIS & BOCKIUS LLP
`1111 Pennsylvania Avenue, NW
`Washington, D.C. 20004-2541
`T. 202.739.3000
`F. 202.739.3001
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`Attorneys for Defendants LG Electronics
`Inc. and LG Electronics U.S.A., Inc.
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`/s/ Melissa R. Smith (with permission)
`Melissa R. Smith
`Texas State Bar No. 24001351
`melissa@gillamsmithlaw.com
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Phone: (903) 934-8450
`Fax: (903) 934-9257
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`Robert T. Haslam (rhaslam@cov.com)
`Anupam Sharma (asharma@cov.com)
`COVINGTON & BURLING LLP
`3000 El Camino Real
`5 Palo Alto Square, 10th Floor
`Palo Alto, CA 94306-2112
`Phone: (650) 632-4700
`Fax: (650) 632-4800
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`Richard L Rainey (rrainey@cov.com)
`Jared Frisch (jfrisch@cov.com)
`COVINGTON & BURLING LLP
`One CityCenter
`850 Tenth Street, NW
`Washington, DC 20001-4956
`Phone: (202) 662.6000
`Fax: (202) 662-6291
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`Attorneys for Defendants Samsung
`Electronics Co., Ltd., and Samsung
`Electronics America, Inc.
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`Case 1:20-cv-00034-ADA Document 30 Filed 12/20/19 Page 10 of 10
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 20th day of December 2019, I electronically filed the
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`foregoing with the Clerk of the Court using the CM/ECF system, which will send notification of
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`such filing to all counsel of record.
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`/s/ Charles L. Ainsworth
`Charles L. Ainsworth
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`10
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