Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
`CENTRAL DIVISION
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`CLEARONE COMMUNICATIONS, INC.,
`Plaintiff,
`
`vs.
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`ANDREW CHIANG; JUN YANG; LONNY
`BOWERS; WIDEBAND SOLUTIONS,
`INC.; VERSATILE DSP, INC.; and BIAMP
`SYSTEMS CORPORATION,
`Defendants.
`
`ORDER
`AND
`MEMORANDUM DECISION
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`Case No. 2:07-CV-37-TC
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`This matter comes before the court on pro se Defendant Lonny Bowers’ two post-
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`judgment motions filed under Rule 60(b) of the Federal Rules of Civil Procedure. Both are
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`titled “Motion for Relief of Judgment and Stay [of] Enforcement” (see Dkt #s 1602 & 1656) and
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`are joined by pro se Defendants Andrew Chiang and Jun Yang (see Dkt #s 1699 & 1721).
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`Mr. Bowers, Mr. Chiang, and Dr. Yang seek relief from the judgment the court entered
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`after a two-week jury trial and jury verdict finding them liable for damages caused by, among
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`other things, their wilful and malicious misappropriation of Plaintiff ClearOne Communications,
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`Inc.’s trade secret, the “Honeybee Code.” Mr. Bowers claims he has discovered new evidence of
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`fraud that irreparable tainted the trial. Because Mr. Bowers has not satisfied the stringent
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`Mr. Bowers filed a third Rule 60(b) motion (Dkt # 1687) on June 19, 2009, but the court
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`has stayed briefing on that motion until resolution of Mr. Bowers’ first two Rule 60(b) motions.
`(See July 7, 2009 Order (Dkt # 1723).)
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 2 of 12
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`standards that courts require of Rule 60(b) movants, his Rule 60(b) motions, and Mr. Chiang’s
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`and Dr. Yang’s joinder motions, are DENIED.
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`ANALYSIS
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`Brief Background of Case
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`In this aggressively litigated and highly acrimonious trade secret misappropriation case,
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`Plaintiff ClearOne Communications, Inc. asserted various claims against Mr. Bowers and his co-
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`defendants. Throughout the pre-trial proceedings, trial, and post-verdict proceedings leading to
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`entry of final judgment, Mr. Bowers was represented by licensed and able counsel. But now, as
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`ancillary matters continue to be raised, Mr. Bowers appears pro se.
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`In addition to his fraud allegations against ClearOne, Mr. Bowers focuses on his alleged
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`lack of access to crucial confidential documentation of the Honeybee Code, contending that this
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`lack of access irreparably harmed his ability to defend himself at trial.
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`Access to the Honeybee Code has been restricted based on a confidentiality order that has
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`been enforced by ClearOne and the court numerous times throughout this litigation. Because the
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`confidentiality order’s genesis is relevant to the court’s analysis of Mr. Bowers’s claims, some
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`background on the events leading up to the order is set forth immediately below.
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`The confidentiality order was issued relatively early in pre-trial proceedings after
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`ClearOne and the WideBand Defendants (including Lonny Bowers), through their attorneys, filed
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`motions seeking a confidentiality order (see Dkt #s 14, 34). Apparently both sides agreed that a
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`confidentiality order was needed in this trade secret litigation, but they disagreed about some of
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`the content and language proposed by their opponents. (See, e.g., WideBand’s Objections to
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`Pl.’s [Proposed] Revised Confidentiality Order (Dkt # 69) at 2 (objecting to ClearOne’s omission
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 3 of 12
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`of language in proposed order allowing disclosure of information to Defendants “Andrew
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`Chiang, Jung Yang, and certain individuals within Wideband whose subjective knowledge of
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`Plaintiff’s trade secrets is relevant and necessary to Wideband’s defense”).) United States
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`Magistrate Judge David Nuffer held a hearing on the discrete disputes and resolved them in his
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`Order Granting in Part Motions for Confidentiality Order [hereinafter “Confidentiality Order” or
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`“Protective Order”]. (Dkt # 74.) No party appealed Judge Nuffer’s ruling to the district court.
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`The Confidentiality Order (which remains in effect) allows any party, in good faith, to
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`designate information as “CONFIDENTIAL” (i.e., for the eyes of parties, outside counsel, and
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`independent outside experts only) or “HIGHLY CONFIDENTIAL” (i.e., for the eyes of outside
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`counsel and independent outside experts only) before disclosing the information for litigation
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`purposes. (Confidentiality Order at ¶¶ 1, 3, 4, 6, 11, 12.) Before disclosure, each party has the
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`right and opportunity to challenge any designation made by a party. (Id. ¶¶ 14, 25.) Throughout
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`the litigation, the parties used the designations frequently, including the “HIGHLY
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`CONFIDENTIAL” designation for the claimed trade secret, the Honeybee Code.
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`After extensive discovery and resolution of multiple pre-trial motions, the court held a
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`two-week trial. The court notes that Mr. Bowers’s independent outside expert, Dr. Richard
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`Koralek, had access to “HIGHLY CONFIDENTIAL” information (i.e., the Honeybee Code) and
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`testified about the code during trial. (See, e.g., Tr. of Oct. 28, 2008 Trial Testimony of Dr.
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`Koralek at 199, 208-210, 214-215 (discussing expertise and testifying that he reviewed
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`To avoid any confusion, the court notes that the terms “Confidentiality Order” and
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`“Protective Order” have been used interchangeably throughout the case to refer to Judge Nuffer’s
`March 9, 2007 Order.
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 4 of 12
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`WideBand source code and Honeybee source code), 216-223, 228-267 (testifying that Honeybee
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`source code was in public domain); Tr. of Oct. 29, 2008 Trial Testimony at 12-171 (same).) Mr.
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`Bowers, on the other hand, was not designated or qualified as an expert witness, nor did he
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`testify as such at the trial. (See Tr. of Oct. 27, 2008 Trial Testimony of Lonny Bowers at 92-130;
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`Tr. of Nov. 3, 2008 Trial Testimony of Lonny Bowers at 123-246; id. at 174 (court sustaining
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`objection that witness Lonny Bowers may not comment on whether many of Honeybee algorithm
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`components were in public domain because “he is not an expert”).)
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`On November 5, 2008, the jury returned a verdict in favor of ClearOne, finding Mr.
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`Bowers (and his co-defendants) liable for willful and malicious misappropriation of ClearOne’s
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`trade secret. (See Special Verdict (Dkt # 1286).) On April 20, 2009, the court issued an Order &
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`Memorandum Decision as well as a final judgment against Mr. Bowers and his co-defendants.
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`(See Dkt # 1531.)
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`Mr. Bowers, having failed to obtain relief under Rule 59, now seeks relief under Federal
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`Rule of Civil Procedure 60(b). On May 18, 2009, Mr. Bowers filed a Motion for Relief of
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`Judgment and Stay [of] Enforcement (Dkt # 1602) [hereinafter “First Rule 60(b) Motion”]. On
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`June 2, 2009, Mr. Bowers filed another Motion for Relief of Judgment and Stay [of]
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`Enforcement (Dkt # 1656) [hereinafter “Second Rule 60(b) Motion”]. Because there is
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`significant overlap between the two motions, the court combines its analysis of Mr. Bowers’s
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`claims.
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`Mr. Bowers, apparently not satisfied with what he had submitted in his First 60(b)
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`Motion, filed his Second 60(b) Motion three days before ClearOne’s opposition to his First 60(b)
`Motion was due. In his Second 60(b) Motion, he expands on what he alleges in the first motion.
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 5 of 12
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`Rule 60(b) Standards
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`ANALYSIS
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`The Federal Rules of Civil Procedure provide the court with authority to grant relief from
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`a final judgment, order or proceeding on the following grounds:
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`On motion and just terms, the court may relieve a party or its legal representative
`from a final judgment, order, or proceeding for the following reasons:
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`(1)
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`(2)
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`(3)
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`(4)
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`(5)
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`mistake, inadvertence, surprise, or excusable neglect;
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`newly discovered evidence that, with reasonable diligence, could not have
`been discovered in time to move for a new trial under Rule 59(b);
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`fraud (whether previously called intrinsic or extrinsic), misrepresentation,
`or misconduct by an opposing party;
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`the judgment is void;
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`the judgment has been satisfied, released or discharged; it is based on an
`earlier judgment that has been reversed or vacated; or applying it
`prospectively is no longer equitable;
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`(6)
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`any other reason that justifies relief.
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`Fed. R. Civ. P. 60(b).
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`“Relief under Rule 60(b), however, is extraordinary and may only be granted in
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`exceptional circumstances.” Yapp v. Excel Corp., 186 F.3d 1222, 1231 (10th Cir. 1999)
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`(internal quotation marks and citation omitted) (emphasis added). See also Cummings v.
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`General Motors Corp., 365 F.3d 944, 955 (10th Cir. 2004) (“Parties seeking relief under Rule
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`60(b) have a higher hurdle to overcome because such a motion is not a substitute for an appeal.”),
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`abrogated on unrelated grounds, Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394
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`(2006). Furthermore, “Rule 60(b) relief is not available to allow a party merely to reargue issues
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 6 of 12
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`previously addressed to the court.” Allender v. Raytheon Aircraft Co., 439 F.3d 1236, 1242
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`(10th Cir. 2006).
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`Based on a review of Mr. Bowers’s motions, and giving Mr. Bowers the benefit of the
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`doubt, it appears from his pleadings (although he does not specifically state) that the asserted
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`bases for relief are newly discovered evidence (60(b)(2)); fraud, misrepresentation or misconduct
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`(60(b)(3)); and the catch-all provision of 60(b)(6) providing for relief for “any other reason that
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`justifies relief.”
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`To obtain relief under Rule 60(b)(2) (through a claim of newly discovered evidence), Mr.
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`Bowers must show all of the following:
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`(1) the evidence was newly discovered since the trial; (2) [Mr. Bowers] was
`diligent in discovering the new evidence; (3) the newly discovered evidence could
`not be merely cumulative or impeaching; (4) the newly discovered evidence [is]
`material; and (5) that a new trial[ ] with the newly discovered evidence would
`probably produce a different result.
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`Zurich N. Amer. v. Matrix Serv., Inc., 426 F.3d 1281, 1290 (10th Cir. 2005) (internal quotation
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`marks and citation omitted).
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`Under Rule 60(b)(3) (claim of fraud), Mr. Bowers bears the burden of establishing fraud
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`by clear and convincing evidence. Yapp, 186 F.3d at 1231; Wilkin v. Sunbeam Corp., 466 F.2d
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`714, 717 (10th Cir. 1972). “This he can do only by showing that [ClearOne] acted with ‘an
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`intent to deceive or defraud the court,’ by means of a deliberately planned and carefully executed
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`scheme.’” Yapp, 186 F.3d at 1231 (quoting Robinson v. Audi Aktiengesellschaft, 56 F.3d 1259,
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`1267 (10th Cir. 1995)); see also Zurich, 426 F.3d at 1291-92 (noting that heightened standard
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`applies regardless of whether claim is one of fraud between parties, fraud on the court, or
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`misconduct). Moreover, “the challenged behavior must substantially have interfered with the
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`[Mr. Bowers’] ability fully and fairly to prepare for and proceed at trial.” Cummings, 365 F.3d at
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`955 (internal quotation marks and citation omitted).
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`Finally, under Rule 60(b)(6) (claim of injustice), “relief is even more difficult to attain
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`and is appropriate only ‘when it offends justice to deny such relief.’” Yapp, 186 F.3d at 1232
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`(quoting Cashner v. Freedom Stores, Inc., 98 F.3d 572, 580 (10th Cir. 1996)). This catch-all
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`provision is mutually exclusive of the other five categories under Rule 60(b), so Mr. Bowers
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`must establish some injustice apart from the fraud allegations he makes. Zurich, 426 F.3d at
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`1293.
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`Mr. Bowers’s Rule 60(b) Motions
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`In general, Mr. Bowers contends that he uncovered new evidence demonstrating that
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`ClearOne committed fraud during the litigation by hiding information conclusively establishing
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`that the Honeybee Code is not a trade secret (a material element of ClearOne’s trade secret
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`misappropriation claim). He also contends that ClearOne deliberately withheld crucial portions
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`of the Honeybee Code until trial, when it was too late to mount a reasonable defense. Underlying
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`Mr. Bowers’s contention is the assumption that only he and Dr. Yang (an author of the code), but
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`not his counsel or independent outside expert witness, could ascertain the public domain
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`elements of the Honeybee Code and bring to the court’s and jury’s attention that, in his view, the
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`Honeybee Code was not a trade secret at all. For the reasons set forth below, Mr. Bowers has not
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`met his burden under any of the three 60(b) sections, and so he is not entitled to the relief sought.
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`In his First 60(b) Motion, Mr. Bowers presents what he contends is evidence—i.e.,
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`ClearOne’s 1997 Copyright Application TX 6-607-039 for Honeybee Conference Phone
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`Code—that the Honeybee Code is not, and never was, a trade secret and that ClearOne
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 8 of 12
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`knowingly withheld such evidence while contending throughout the trial that it was a trade
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`secret. Mr. Bowers recently (post-judgment) obtained the document from the Library of
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`Congress, where, in February 2007, ClearOne’s patent counsel openly filed a copy of the
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`application “[p]er the guidelines relating to Computer Programs Containing Trade Secrets.” (Ex.
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`A to First 60(b) Mot.) The Library of Congress document contains only the first twenty-five and
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`last twenty-five pages of the Honeybee source code.
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`Mr. Bowers contends that much of those pages was “copied, word for word” by the
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`Defendants from other publicly available source code. (First 60(b) Mot. at unnumbered p. 3.) 4
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`Specifically, Mr. Bowers compares portions of an “open source code called ‘Speex’” and
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`PictureTel Patent No. 5305307 (which was discussed at trial by Mr. Bowers’s expert witness, Dr.
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`Koralek) to portions of the code submitted in the ClearOne copyright application. Mr. Bowers’s
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`claim that the redacted first and last twenty-five pages of the Honeybee source code (out of
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`hundreds, if not thousands, of pages) somehow reveal that ClearOne has no trade secret, and that
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`ClearOne has perpetrated a fraud on the court, is not persuasive. The limited amount of source
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`code disclosed as part of ClearOne’s submission to the Library of Congress or in its copyright
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`application does not disclose the trade secret’s algorithms or implementation of those algorithms,
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`Mr. Bowers also attaches to his First 60(b) Motion a lengthy complaint he presented to
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`the United States Department of Justice contending that ClearOne is guilty of criminal copyright
`fraud and should be prosecuted. The court will not consider the claims in Mr. Bowers’ complaint
`to the DOJ, because much of the complaint either duplicates what he contends in his motion or
`goes beyond the scope of what was before the court during trial (i.e., trade secret law, not
`copyright law). Whether ClearOne has obtained a valid copyright on the Honeybee Code has no
`relevance to whether the algorithms and code were misappropriated by Defendants. Moreover,
`ClearOne does a sufficient job rebutting the allegations in Mr. Bowers’s complaint to the DOJ.
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`According to Mr. Bowers, Speex has a copyright date of 2002-2003.
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`all of which were discussed at trial and in the jury instructions. (See Jury Instr. No. 18 (Dkt
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`# 1285).) Indeed, no one disputed that some aspects of the Honeybee Code were in the public
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`domain. But those aspects were not what ClearOne claimed as a trade secret. In essence,
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`ClearOne’s trade secret is greater than the sum of its parts.
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`Ironically, Mr. Bowers asserts that he has raised this very issue “throughout this litigation
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`including at deposition, trial and post trial”—i.e., that the Honeybee Code is nothing but publicly
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`available source code. His point actually supports ClearOne’s accurate assertion that Mr. Bowers
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`is not saying anything new in his 60(b) motions and that he was not foreclosed from raising this
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`defense.
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`Mr. Bowers’s other arguments are equally ineffective. Not only is his evidence not new,
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`but it was in the hands of the defendants before trial. Whether the WideBand Defendants
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`presented it is not due to any actions taken by ClearOne.
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`For instance, he claims that “Old ClearOne” (a predecessor to ClearOne) did not take
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`steps to protect the Honeybee Code’s trade secret status and that ClearOne deliberately withheld
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`such evidence (the Stephen Cummings 2007 Declaration) from him, the court, and the jury. But
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`to support his argument, he relies on information that was already available or readily
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`ascertainable with reasonable diligence by him, the WideBand Defendants and their counsel. In
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`addition to the Cummings Declaration, other information upon which Mr. Bowers relies could
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`have been (and, in some instances, was) raised in his defense.
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`Specifically, the “newly discovered” evidence not only existed before trial (and could
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`have been obtained by Mr. Bowers in the same manner he has used at this late stage in the
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`proceedings), but much of it was produced to or by the WideBand Defendants throughout the
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 10 of 12
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`case. For example,
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`•
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`•
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`•
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`Counsel for ClearOne produced the Honeybee Copyright to counsel for the
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`WideBand Defendants on April 23, 2008, six months before trial. (ClearOne’s
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`Combined Opp’n (Dkt # 1693) at 12.)
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`ClearOne delivered the Honeybee Code to counsel for the WideBand Defendants
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`on April 20, 2007. (Id.)
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`The September 19, 2007 declaration of Stephen Cummings is not “newly
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`discovered.” In fact, counsel for the WideBand Defendants (which included
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`Lonny Bowers) obtained and produced the declaration to ClearOne, with their
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`own “Highly Confidential” designation on it, in September 2007. (Id. at 13.) Mr.
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`Bowers’s contentions regarding Mr. Cummings’ testimony is particularly bold
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`given the fact that the declaration is on the docket for this case at docket entry
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`number 441 (dated September 19, 2007). See also Oct. 10, 2007 Mem. of Defs.
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`Supp. Joint Mot. to Bar Opinion Testimony of Tracy Bathurst (Dkt # 521) (citing
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`to Stephen Cummings Declaration and arguing that Honeybee Code was not trade
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`secret because evidence shows it was “freely available to everyone” before
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`ClearOne acquired Old ClearOne).
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`•
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`And the affidavits of Brian Puh, James Zhang, Jun Yang, and Andrew Chiang
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`certainly could have been obtained before trial.
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`Mr. Bowers’s protestations are simply not credible.
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`Mr. Bowers also claims that he and his co-defendant Dr. Yang were prevented from
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`reviewing crucial information that would have been material to his defense at trial. Specifically,
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`Case 2:07-cv-00037-DN Document 1754 Filed 07/20/09 Page 11 of 12
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`he contends that ClearOne deliberately withheld the Honeybee Copyright and denied access to
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`the Honeybee Code through use (or abuse, as he contends) of the Confidentiality Order. He is
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`wrong. The court notes that all information labeled “Highly Confidential” was available to Mr.
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`Bowers’s attorneys and independent outside expert witness. Also, Mr. Bowers and Dr. Yang
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`attended many hearings, and the trial of course, where much of this information was discussed.
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`Still, he apparently believes his knowledge and Dr. Yang’s knowledge is so superior to that of
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`their own counsel and Dr. Koralek that only he and Dr. Yang could have made the connection he
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`now urges the court to adopt (despite the fact that he inexplicably failed to raise his concerns
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`with counsel and Dr. Koralek once he discovered evidence to support his theories). Mr.
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`Bowers’s arguments are no more persuasive now than they were in earlier pleadings.
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`Conclusions
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`Mr. Bowers has not met his burden under Rule 60(b)(2). None of the evidence cited by
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`Mr. Bowers in his two motions qualifies as “newly discovered,” because the information upon
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`which he relies was previously produced to Mr. Bowers, through counsel, during the litigation or
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`was readily ascertainable by exercising reasonable diligence. In any case, the evidence is not
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`material, and is, for the most part, cumulative, so presenting it would not produce a different
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`result at trial.
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`Mr. Bowers does not come close to meeting his burden under 60(b)(3) (requiring a
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`showing of fraud by clear and convincing evidence). First, conclusory allegations of fraud do not
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`satisfy the Rule 60(b)(3) standard. Zurich, 426 F.3d at 1292. Second, he has not presented any
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`evidence of any intent by ClearOne to deceive or defraud the court through means of a
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`deliberately planned and carefully executed scheme. In short, nothing he points to was hidden.
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`And he certainly has not presented evidence sufficient to justify relief under Rule
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`60(b)(6). He makes unsupported allegations of fraud and re-hashes evidence and arguments
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`presented to the court long ago. “Rule 60(b) relief is not available to allow a party merely to
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`reargue issues previously addressed by the court.” Allender v. Raytheon Aircraft Co., 439 F.3d
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`1236, 1242 (10th Cir. 2006). His dissatisfaction with the jury verdict and final judgment does
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`not qualify him for the extraordinary relief he seeks.
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`ORDER
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`For the foregoing reasons, pro se Defendant Lonny Bowers’s Motion for Relief of
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`Judgment and Stay Enforcement (Dkt # 1602) and his Motion for Relief of Judgment and Stay
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`Enforcement (Dkt # 1656) are DENIED. Consequently, pro se Defendant Andrew Chiang’s and
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`pro se Defendant Jun Yang’s motions for joinder in Mr. Bowers’ First and Second 60(b) Motions
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`(see Dkt #s 1699 & 1721) are DENIED.
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`SO ORDERED this 20th day of July, 2009.
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`BY THE COURT:
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`TENA CAMPBELL
`Chief Judge
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