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`THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
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`CARBYNE BIOMETRICS, LLC,
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`Plaintiff,
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`Civil Action No. 1:23-cv-00324-ADA
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`v.
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`APPLE INC.,
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`Defendant.
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`JURY TRIAL
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`DISCOVERY DISPUTE ORDER
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`The parties submitted the following discovery disputes to the Court via email.
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`Issue 1: Whether the Court should compel Carbyne to search for and produce communications
`to/from litigation funders concerning the Asserted Patents (Apple’s Interrogatory No. 5).
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`Apple’s Position
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`Carbyne’s pre-suit communications with third-parties about the Patents-in-Suit, are
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`relevant, discoverable, and not privileged or work product. Carbyne refuses to search for and
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`produce any such communications that encompass communications with litigation funders. But
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`these communications may contain Carbyne’s beliefs on whether others
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`infringe or
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`characterization(s) of the Patents-in-Suit’s scope, which are relevant to non-infringement, §101
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`unpatentability, and Georgia-Pacific factors 8 (popularity of patented invention), 9 (its utility),
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`and 10 (nature and benefits of patented invention) and are therefore highly probative—regardless
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`whether such communications were with a funder or someone else.
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`Nor does the work product doctrine justify Carbyne’s failure to search for these
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`documents. Work product privilege applies only where the “primary motivating purpose behind
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`the [document’s] creation . . . was to aid in possible future litigation.” In re Kaiser Aluminum &
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`1
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`Chem. Co., 214 F.3d 586, 593 (5th Cir. 2000). Communications with third-party litigation
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`funders about the Patents-in-Suit “are not designed to prepare a specific case for trial or
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`negotiation;” they merely “back up” a funding figure. See United States v. El Paso Co., 682 F.2d
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`530, 543-544 (5th Cir. 1982) (noting “tax pool analysis concocts theories about the results of
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`possible litigation” which “are not designed to prepare a specific case for trial” but solely “back
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`up a figure on a financial balance sheet”); see also Cantu v. TitleMax, Inc., No. 5:14-CV-628 RP,
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`2015 WL 5944258, at *4 (W.D. Tex. Oct. 9, 2015) (document supporting “figure on a financial
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`balance sheet,” containing “attorney’s impression as to the likelihood of success” not work
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`product). Such communications are not privileged as third-party litigation funders are not
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`assisting McKool in providing legal advice or preparing the case for trial. Contrary to Carbyne’s
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`assertion, the Western District of Texas, to Apple’s knowledge, has never explicitly recognized
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`litigation funding materials as undiscoverable protected work product.
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`Relief: Order Carbyne to search for and produce any pre-suit communications to/from
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`and third parties concerning the Patents-in-Suit, and to the extent Carbyne contends any such
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`communications are protected from discovery, to log such documents on a privilege log
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`containing sufficient information for Apple to assess any such contention.
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`Carbyne’s Position
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`Carbyne’s pre-suit communications with third-party litigation funders are privileged
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`work product and are not discoverable as any such communications that may exist invariably
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`include Carbyne’s counsel’s opinions, mental impressions, and evaluations of case strategy.
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`District courts in Texas, including this Court, recognize litigation funding materials as
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`protected work product that is not discoverable, and the Fifth Circuit has never held otherwise.
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`See, e.g., United States v. HomewardResidential, Inc., 2016 WL 1031154, at *6 (E.D. Tex. Mar.
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`2
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`15, 2016) (“The Court finds that the litigation funding information is protected by the work
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`product doctrine. The litigation funding documents were between Fisher and actual or potential
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`litigation funders and were used to possibly aid in future or ongoing litigation.”); United States v.
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`Ocwen Loan Serv., LLC, 2016 WL 1031157, at *6 (E.D. Tex. Mar. 15, 2016) (same); Mondis
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`Tech., Ltd. v. LG Elecs., Inc., 2011 WL 1714304, at *3 (E.D. Tex. May 4, 2011) (“All of the
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`documents were prepared . . . with the intention of coordinating potential investors to aid in
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`future possible litigation. The Court holds that these documents are protected by the work
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`product protection.”); WSOU Invs. LLC v. OnePlus Tech. (Shenzhen) Co., No. W-20-CV-00952-
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`ADA, Dkt. 125 at 5-6 (W.D. Tex. Dec. 29, 2022) (collecting cases) (“The Court has been very
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`clear in the past that the underlying loan and security agreements with BP Funding and OT
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`Terrier are not discoverable because they are not relevant.” (emphasis added)).
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`Apple’s contention that communications and documents exchanged with litigation
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`funders are discoverable because the primary purpose for their creation was not to aid in possible
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`future litigation is simply incorrect. The sole purpose of any communications or documents
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`exchanged with potential funders is to coordinate investors to aid in bringing litigation against a
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`specific party. See HomewardResidential, Inc., 2016 WL 1031154, at *6; Mondis Tech., Ltd.,
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`2011 WL 1714304, at *3.
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`Apple’s cited cases are also inapposite. First, none of these cases holds that
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`communications or documents related to litigation funding are discoverable. Second, Apple’s
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`cases are factually distinguishable. In these cases, the documents at issue were financial
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`statements or tax pooling agreements that were prepared by third parties during audits or
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`assessments. While these assessments considered potential litigation risks, they were not
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`prepared for a specific case. The opposite is true of litigation funding communications and
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`3
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`documents. They are prepared solely with an eye towards litigating specific claims against a
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`specific party in a specific case. Therefore, any such communications are protected work
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`product, and the Court should deny Apple’s request.
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`Relief: Deny Apple’s request.
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`Issue 2: Whether the Court should order Apple to allow Carbyne to print additional source code
`pages beyond the initial 400-page threshold provided for in the Protective Order (Carbyne
`Request for Production Nos. 58 and 59).
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`Carbyne’s Position
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`Carbyne will need to print at least 1,000 pages of source code in order to prepare its
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`technical expert reports. The Protective Order provides that a party may print a total of 400 pages
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`of source code and a “reasonable number of additional pages upon a showing of need and the
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`Producing Party’s consent, wherein consent shall not be unreasonably withheld.” Dkt. 39 at 17.
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`Carbyne’s request of 1,000 printed pages is reasonable given the complexity of the code at issue
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`and the number of different operating systems accused in this case.
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`The parties agreed to the 400-page threshold before Carbyne inspected Apple’s source
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`code. After Carbyne began reviewing the code, it soon realized this threshold was too low, given
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`the complexity of the code and the fact that its infringement allegations pertain to three different
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`operating systems, including the Vision Pro, which was released almost five months after the
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`Protective Order was entered. Thus far, Carbyne has printed 253 pages for the iOS and macOS
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`Accused Products that cover some limitations for the Authentication Patents and has submitted
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`print requests for another 350 pages. Based on the current prints and what code remains to be
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`printed, Carbyne’s source code reviewers estimate they will need at least 1,000 pages to establish
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`infringement of both the Authentication Patents and Fraud Reduction Patents for the iOS,
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`macOS, and visionOS Accused Products.
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`4
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`As noted, the Protective Order requires Apple to not unreasonably withhold its consent
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`for requests to print a “reasonable number of additional pages.” Dkt. 39 at 17. Carbyne first
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`requested additional pages months ago. But Apple has refused to agree to any additional pages.
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`Apple’s two main reasons for opposing additional pages are meritless. First, Apple’s
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`contention that this dispute is not ripe because Carbyne has not yet reached the 400-page
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`threshold is simply incorrect. Carbyne intends to print additional source code in the next week
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`that will put it beyond the 400-page threshold. Second, Apple’s contention that Carbyne can
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`reduce its printed pages by not printing interstitial code (i.e., code that Apple says “merely
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`show[s] the connection between accused functionalities,” see Ex. C (Mack Letter)) disregards
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`what is needed to establish infringement. The code Carbyne has printed, and intends to print, is
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`needed to prove the Accused Products meet all the limitations of the Asserted Claims and to
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`establish that the cited code actually executes. Apple’s suggestion that Carbyne should go
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`through the source code and cite certain blocks by file name, function, and line will burden
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`Carbyne’s code reviewers with hours of unnecessary extra work and will not establish that the
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`code actually executes. See Ex. C. (Mack Letter).
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`Carbyne has thus shown a need for additional pages and Apple is unreasonably
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`withholding its consent to allow additional printing contrary to the Protective Order.
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`Relief: Order Apple to permit Carbyne to print 1,000 pages of source code to facilitate
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`completion of expert reports.
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`Apple’s Position
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`Carbyne’s request for over double the agreed number of source code print-out pages is
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`not reasonable and is a problem of Carbyne’s own making, stemming from Carbyne’s insatiable
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`5
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`demand (over 100 specific requests) for source code, coupled with threats of motion practice
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`when Apple pushed back on scope.
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`Carbyne overstates its “need” for printed source code. ECF 39 at 17. The 253 pages
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`Carbyne first requested for printing contain code applicable to its contentions for both the
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`Authentication and Fraud Reduction patents-in-suit and cover both macOS and iOS. Carbyne
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`further requested additional code be printed Tuesday before submission of this dispute, with no
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`explanation regarding need. Carbyne has not explained what accused functionalities are not
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`covered by these pages or why an additional operating system (VisionOS) requires over double
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`the source code printouts needed for the other two.
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`Carbyne also fails to justify its need for hundreds of pages of interstitial code, which does
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`not show operation of the accused functionality, but instead, according to Carbyne, is used to
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`“establish that the cited code actually executes.” Carbyne does not explain why an expert must
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`print code to explain that Apple’s source code executes, nor that it failed to account for
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`interstitial code when negotiating printing limits at the beginning of this case.
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`Apple is not unreasonably withholding consent. First, Carbyne’s request to more than
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`double the negotiated pages from 400 to 1,000, without any intermediate increases, is not a
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`“reasonable number of additional pages.” Second, it is not unreasonable for Apple to expect
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`Carbyne to first attempt to comply with the heavily negotiated terms of the Protective Order.
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`During negotiation of the Protective Order, Apple already agreed that a Receiving Party may
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`exchange unneeded source code pages for alternate pages. Yet Carbyne has refused to use this
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`negotiated provision, and instead insists on only an increase in printed pages. Apple also offered
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`to provision a third source code review machine closer to one of Carbyne’s code reviewers to
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`reduce Carbyne’s need for printouts, yet Carbyne would not accept this as a way to resolve the
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`6
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`present dispute and has not explained why this cooperative measure offered by Apple does not
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`satisfy its need for source code access. Carbyne’s desire to streamline its code reviewer’s work
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`(after Carbyne already agreed to the exchange protocol), does not, and should not, outweigh the
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`added risk of loss of Apple’s highly confidential and proprietary source code by permitting more
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`pages be printed.
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`Relief: Deny Carbyne’s request for an increase in the source code printing page limit.
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`The Court, having considered the parties’ discovery disputes and reviewed the related
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`OPINION
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`submissions, IT IS HEREBY ORDERED that:
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`Issue 1 is DENIED.
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`Issue 2 is GRANTED IN PART AND DENIED IN PART WITHOUT PREJUDICE.
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`Apple is hereby ordered to fulfill Carbyne’s now-pending source code print requests for
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`additional pages beyond the 400-page threshold provided for in the Protective Order up to 600
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`pages. (Dkt. 39). Should 600 pages be insufficient, Carbyne shall be entitled to print a reasonable
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`number of additional pages of source code by specifically articulating to Apple the claim
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`element(s) that Carbyne contends the additional pages are relevant to. Apple may offer to
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`stipulate to obviate Carbyne’s need for the code, for example, by stipulating that certain code
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`executes, or that Apple will not contest infringement of the particular claim element in question or
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`otherwise point to the lack of code for any purpose. The parties are ordered to then meet and
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`confer in good faith and in keeping with the Court’s instructions at the discovery dispute
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`hearing. If a dispute remains, the parties may bring the dispute back to the Court’s attention.
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`SIGNED this 28th day of June, 2024
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`ALAN D ALBRIGHT
`UNITED STATES DISTRICT JUDGE
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`7
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