Advanced Electrolyte Technologies LLC et al v. ESDI LLC et al

RESPONSE to Motion

W.D. Tex.December 5, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION ADVANCED ELECTROLYTE TECHNOLOGIES LLC & UBE INDUSTRIES, LTD., Plaintiffs, v. SAMSUNG SDI CO., LTD., SAMSUNG SDI AMERICA, INC., SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC. Defendants. Civil Action No. 1:17-CV-30-LY DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION TO COMPEL RESPONSES TO POST-MARKMAN DISCOVERY FROM DEFENDANTS Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 1 of 13 1 Defendants Samsung SDI Co., Ltd. (“SDI”), Samsung SDI America, Inc. (“SDIA”), Samsung Electronics Co., Ltd. (“SEC”) and Samsung Electronics America, Inc. (“SEA”) (collectively, “Defendants” or “Samsung”) respectfully submit this opposition to Plaintiffs Advanced Electrolyte Technologies LLC and Ube Industries, Ltd.’s Motion to Compel. I. INTRODUCTION Plaintiffs’ motion is premised on a distorted description of the status of discovery in this case and incorrect assumptions about the burden on Samsung of providing discovery on unidentified lithium batteries. First, Plaintiffs did not make a good-faith attempt to resolve the issues that they now bring before the Court as required by Fed. R. Civ. P. 37(a)(1) and Local Rule 7(i). Instead, Plaintiffs unilaterally decided that the parties were at an impasse and filed this motion on the eve of Thanksgiving, without even the slightest suggestion to Samsung at any time prior that it intended to seek relief from the Court. Indeed, for the last several weeks, Samsung has been, and still is in the process of, investigating the issues that Plaintiffs raised during the sole teleconference between the parties to discuss Samsung’s responses to Plaintiffs’ document requests and interrogatories. Plaintiffs’ failure to engage in good-faith discussions with Samsung in an effort to resolve these issues before seeking the intervention of the Court is reason alone to deny their motion. Indeed, despite complaining that Samsung has yet to produce documents, Plaintiffs have also not produced any documents responsive to several of Samsung’s Requests for Production that were served over a year ago. See Ex. B. When asked about the timeline for the production of the documents, Plaintiffs indicated that they would be producing documents around November 16, 2018, but have yet to produce even a single page. See Ex. C. Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 2 of 13 2 Second, Plaintiffs do not dispute that they could determine for themselves which batteries and devices allegedly infringe their patents. They simply claim that it would be a difficult task for them, and far easier for Samsung to provide this information. This assertion, however, is mere speculation on their part. In reality, it would require a significant expenditure of time and resources for Samsung to provide the broad scope of discovery Plaintiffs’ seek. And, it would essentially require Samsung to perform an infringement analysis on Plaintiffs’ behalf. This is particularly true as to SEC and SEA (collectively, “Electronics Defendants”), who generally lack battery chemistry information from their third-party suppliers. Finally, contrary to Plaintiffs’ assertion, Defendants did not arbitrarily object to the scope of the discovery Plaintiffs are seeking on their batteries and devices. The fact is that Plaintiffs’ definition of “Subject Batteries” was far from limited to “batteries that almost certainly infringe” the asserted patents, and would include numerous batteries outside the scope of the asserted patents, including from licensed suppliers of batteries and/or electrolyte. Pl. Op. Br., at 4. Plaintiffs are simply not entitled to conduct a fishing expedition on large swaths of Defendants’ businesses, at Defendants’ expense no less, in the hope of gathering evidence to prove their case. Given the breadth of their definition of “Subject Batteries,” Defendants had no choice but to object to the requests. II. FACTUAL BACKGROUND On August 30, 2018, Plaintiffs served six sets of written discovery on Defendants – a single set of Requests for Production on SDI and SDIA (collectively, “SDI Defendants”) and the Electronics Defendants, and two sets of Interrogatories again on each of the SDI Defendants and Electronics Defendants. Due to the complexity of Plaintiffs’ discovery requests, Samsung requested a two-week extension to provide its responses and objections. At no time did Samsung Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 3 of 13 3 represent that the extension was anything but a request to provide its responses and objections nor did Plaintiffs indicate that their consent to the extension request was contingent on Samsung producing documents. Samsung subsequently served its responses and objections on October 15, 2018. On October 22, 2018, Plaintiffs requested a teleconference to discuss Samsung’s responses, which the parties agreed would take place on October 25, 2018. See Ex. D. Plaintiffs began the October 25 teleconference by asserting, without any authority, that Samsung should have produced documents when it served its discovery responses. See Ex. A, at ¶ 3. Defendants explained, however, that they were in the process of collecting documents, but in view of the fact that SDI and SEC are based in Korea, the task of identifying, collecting, and processing documents for production would take time. See id. Defendants were clear, however, that documents would be forthcoming as soon as reasonably practicable. By all accounts, Plaintiffs appeared to be satisfied with this explanation. See id. Further, with the exception of the discovery Plaintiffs were seeking under their definition of “Subject Batteries,” Samsung never foreclosed the possibility of providing amended responses or discovery that might address Plaintiffs’ concerns.1 In fact, several times during the call, Plaintiffs stated that they “understood Samsung’s position.” See id., at ¶ 4, 6. As to the issue of discovery on lithium batteries beyond those specifically identified by Plaintiffs in their Complaints and/or Infringement Contentions, Samsung explained that conducting searches for “Subject Batteries,” as defined by Plaintiffs, would be unduly burdensome, and unfairly shift Plaintiffs’ burden of proof onto Samsung. See id., at ¶ 6. Again, Plaintiffs stated that they “understood 1 In fact, during the October 25, 2018 call, Samsung proposed that the parties exchange initial disclosures because Samsung believed that the disclosures would address certain of Plaintiffs’ issues concerning the identity of individuals knowledgeable about the technical aspects of Defendants’ batteries and their sales. See id., at ¶ 5. The parties exchanged Initial Disclosures on November 9, 2018. Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 4 of 13 4 Samsung’s position.” See id. At no point during the call did Plaintiffs state that it was their view that the parties were at an impasse on any of the issues discussed. Indeed, at the conclusion of the call, Samsung was under the impression that both sides would continue communications about the discovery disputes and assumed that a resolution satisfactory to both sides would be reached. See id., at ¶ 7. In the weeks following the meet and confer, Samsung received two emails from Plaintiffs. See Exs. C and E. Notably, neither of Plaintiffs’ emails raised any dissatisfaction with the progress by Samsung with respect to the discovery issues discussed on the October 25 teleconference, or provided any indication that Plaintiffs wished to continue discussions on narrowing the scope of discovery of Defendants’ lithium batteries. See id. For each email that Samsung received from Plaintiffs, it sent back a timely response. See Exs. F and G. In view of Plaintiffs’ silence on these issues, Samsung reasonably assumed that Plaintiffs were simply waiting for Samsung to produce documents. Indeed, this was not an unreasonable view given that fact that discovery is not closing for another six months, and Plaintiffs also have not produced any documents. As a result, the first time Samsung was made aware that Plaintiffs had issues with the progress of Defendants’ discovery was when it received Plaintiffs’ motion to compel on the eve of the Thanksgiving holiday. Prior to that, despite Plaintiffs’ assertions to the contrary, there was simply no effort – “substantial” or otherwise – on their part “to persuade Defendants to provide . . . discovery.” Pl. Op. Br., at 2. III. ARGUMENT A. Plaintiffs Did Not Comply with Fed. R. Civ. P. 37(a)(1) and L.R. CV-7(i) Federal Rule of Civil Procedure 37 requires any motion to compel to “include a certification that the movant has in good faith conferred or attempted to confer with the person or Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 5 of 13 5 party failing to make disclosure or discovery in an effort to obtain it without court action.” “Good faith” means “a genuine attempt to resolve the discovery dispute through non-judicial means” and “entails two-way communication, communication which is necessary to genuinely discuss any discovery issues and to avoid judicial recourse.” Compass Bank v. Shamgochian, 287 F.R.D. 397, 399 (S.D. Tex. 2012). Similarly, Local Civil Rule CV-7(i) permits the Court to deny a non- dispositive motion where, as here, the movant fails to advise the Court that the parties “have first conferred in a good-faith attempt to resolve the matter by agreement and, further, certifies the specific reason that no agreement could be made.” (Emphasis added). Here, Plaintiffs have not complied with either rule. Plaintiffs’ Certificate of Conference incorrectly states that Plaintiffs’ counsel conferred in good faith by phone and emails to resolve the disputes presented to the Court. As explained above, the parties had a single teleconference that in Samsung’s view was the beginning, not the end, of discussions between the parties concerning Plaintiffs’ overbroad discovery requests. Further, it is not the case, as Plaintiffs state, that they ever attempted to resolve any issues presented for the Court’s consideration through emails. In this regard, it is not surprising that Plaintiffs have not attached even a single email to their motion as none exist. Moreover, Plaintiffs do not, and cannot, provide any specific reason why a resolution could not be reached by the parties. Instead, they merely state that “[t]he parties have not been able to reach an agreement.” Pl. Cert. Con. Such a conclusory statement, however, is insufficient and does not comply with the requirements of Local Rule 7(i), particularly where the parties disagree about the state of discussions. See, e.g., FieldTurf US, Inc. v. Tencate Thiolon Middle East, LLC, 2012 WL 844671, at *2 (W.D. Tex. Mar. 12, 2012) (“The applicable local rule requires not just a conference, but also requires the movant to ‘certif[y] the specific reason(s) that no agreement could Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 6 of 13 6 be made.’ Local Rule CV–7[(i)]. [The movant’s] certificate of conference fails to meet this requirement.”). “‘When a discovery dispute arises, opposing lawyers should attempt to resolve it by working cooperatively together. A lawyer should refrain from filing motions to compel or for sanctions unless all reasonable efforts to resolve the dispute with opposing counsel have been exhausted.’” Bitterroot Holdings, LLC v. Bank of N.Y. Mellon, 2015 U.S. Dist. LEXIS 181012, at *7 (W.D. Tex. Aug. 25, 2015) (quoting L.R. AT-4(e)). Plaintiffs’ actions far fall short of this standard. There was no good-faith attempt to resolve the issues without involving the Court. Instead, Plaintiffs blindsided Samsung with a motion to compel at the beginning of a holiday weekend. This is precisely the type of behavior discouraged by Local Rule AT-4(e), and is reason alone for the Court to deny Plaintiffs’ motion. B. Plaintiffs’ Definition of “Subject Batteries” is Overbroad The central issue presented by Plaintiffs’ motion is the scope of discovery Samsung should be obligated to provide concerning their lithium batteries. Plaintiffs seek discovery relating to “Subject Batteries” made, offered for sale, sold or imported by Samsung in the United States on or after January 18, 2011. Plaintiffs broadly define “Subject Batteries” as “lithium secondary batteries that have one or more cyclic carbonate(s) in addition to one or more of the following: 1,3-propane sultone, adiponitrile, succinonitrile or vinylene carbonate.” See Ex. H to Plf. Mot. Comp. As Plaintiffs are aware, all of the compounds in their definition of “Subject Batteries” are common to electrolytic solutions used in lithium batteries. Consequently, the discovery they seek effectively covers all lithium batteries the SDI Defendants manufacture, and all downstream products the Electronics Defendants sell in the United States that may contain a lithium battery. This is the epitome of overbreadth. Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 7 of 13 7 Moreover, Plaintiffs’ definition would require Samsung to provide discovery on batteries that are incapable of infringing Plaintiffs’ patents, and are therefore not a proper subject of this action. For starters, Plaintiffs’ definition is not limited to batteries manufactured by SDI, and thus potentially encompasses licensed batteries from third-party suppliers to the Electronics Defendants that are not parties to this litigation and who do not share with the Electronics Defendants the battery chemistry information necessary to determine their relevance to Plaintiffs’ claims. Plaintiffs thus clearly seek to improperly shift the infringement analysis for a large swath of products to the Electronics Defendants, who lack the technical information necessary to perform such an analysis. And even as to SDI batteries, Plaintiffs fail to properly tie the scope of the requests to the asserted patents. For example, the ‘809 and ‘001 patents recite lithium batteries that contain, among other components, both linear and cyclic carbonates. But, Plaintiffs’ definition of “Subject Batteries” would require Defendants to produce documents related to any lithium batteries as long as they included a cyclic carbonate and one of the four listed compounds even if they did not contain a linear carbonate, as required by the patent claims. In addition, the ‘033 and ‘307 patents both require electrolytic solutions that contain a cyclic carbonate, a sultone-containing compound, and either adiponitrile or succinonitrile. Plaintiffs’ definition, however, only requires a cyclic carbonate and at least one other component, while the ‘033 and ‘307 patents require both a sultone- containing compound and a dinitrile in addition to the cyclic carbonate. To further compound the problem, the asserted claims include very precise amounts of the components contained in the electrolytic solutions, but none of this is taken into account in Plaintiffs’ definition of “Subject Batteries.” By failing to account for these particular limitations, Plaintiffs can hardly claim that they “precisely tailor[ed] discovery” only to capture “batteries that Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 8 of 13 8 almost certainly infringe.” Pl. Op. Br., at 4. As Samsung explained during the October 25 teleconference, even under Plaintiffs’ definition of “Subject Batteries,” Plaintiffs would not be entitled to discovery on lithium batteries that contain cyclic carbonates and either adiponitrile or succinonitrile that predate issuance of the ‘033 and ‘307 patents. But, Plaintiffs’ discovery requests seek both technical and damages discovery on lithium batteries that predate these patents by at least 5 years. In short, Plaintiffs definition of “Subject Batteries” is not precisely tailored to obtain “discovery [on] batteries that almost certainly infringe.” Pl. Op. Br., at 4. To the contrary, Plaintiffs’ definition would effectively require Defendants to provide discovery on all lithium batteries, whether or not they infringe the patents-in-suit, that were manufactured by SDI and included in products sold in the United States, as well as any downstream products containing lithium batteries that were sold in the United States by the Electronics Defendants (regardless of source). This would not only be a tremendous waste of resources and place an undue burden on Defendants, it would certainly be far from proportional to the needs of the case. See, e.g., Invensas Corp. v. Renesas Elecs. Corp., 287 F.R.D. 273, 286 (D. Del. 2012) (“Another factor weighing against the grant of Plaintiff’s motion [to compel] in its entirety is the expensive, time-consuming process Defendant would face in identifying discovery regarding unaccused products matching Plaintiff’s proffered definition.”); Connect Insured Tel., Inc. v. Qwest Long Distance, Inc., 2011 WL 4736292, at *3-4 (N.D. Tex. Oct. 6, 2011) (denying Plaintiff’s motion to compel that would have called for defendant to waste “hundreds if not thousands of hours” analyzing records). C. Unbounded Discovery on “Subject Batteries” is Unreasonable Despite the obvious overbreadth in their definition of “Subject Batteries,” Plaintiffs try to justify their request by claiming – without any factual support – that the burden on Plaintiffs to Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 9 of 13 9 locate potentially infringing batteries would be far greater on them than were the Defendants simply to provide the information. However, as discussed above, given the breadth of Plaintiffs’ definition of “Subject Batteries,” it would not be a straightforward task for Defendants to produce the information Plaintiffs seek, and particularly so with regard to batteries supplied to the Electronics Defendants from third-parties not named in this litigation. Indeed, Plaintiffs’ reliance on DDR Holdings, LLC v. Hotels.com, 2012 WL 2935172 (E.D. Tex. July 18, 2012) and Ushijima v. Samsung Elecs. Co. Ltd., et al., Civ. No. 12-CV-00318 (Decision, Dkt. 97, May 29, 2014) is misplaced as these cases are factually distinguishable. In DDR, the Court held that discovery could be extended to five additional products that were not included in the infringement contentions. See DDR, 2012 WL 2935172, at *2. In Ushijima, the plaintiff narrowly crafted the discovery requests to only capture products that met the limitations of the asserted patents. See Ushijima, Op. Br., at 10, Dkt. 83, Apr. 14, 2014 (attached as Ex. H). Here, by contrast, Plaintiffs have served open-ended requests that would require Defendants to turn over large swaths of information relating to potentially all its lithium batteries or products containing those batteries, including those that could not infringe Plaintiffs’ patents. Invensas is a more analogous precedent. In that case, the Court agreed that the scope of discovery should be limited only to unidentified products that would likely meet the limitations of the asserted patents. Invensas, 287 F.R.D. at 286. Further, the Court did not shift the burden of proving infringement to Defendants, but instead ordered Plaintiff to bear a portion of the cost of product samples that Defendants would provide them so Plaintiffs could determine whether the products infringed the asserted patents. Invensas Corp. v. Renesas Elecs. Corp., No. 11-448, Order, at 3, Dkt. 59, Dec. 21, 2012 (attached as Ex. I). Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 10 of 13 10 The Court should deny Plaintiffs’ motion to compel and order Plaintiffs to engage in good- faith discussions to narrow the scope of discovery on “Subject Batteries.” Nonetheless, to the extent the Court believes that Plaintiffs are entitled to discovery on unidentified battery products, the definition of “Subject Batteries” should be limited only to those batteries that are designed or manufactured by SDI and that contain linear and/or cyclic carbonates and other components as recited in the asserted patents. Further, the cost of providing the discovery should be shared by Plaintiffs as in Invensas. D. Defendants’ Interrogatory Responses Plaintiffs’ motion also lists several interrogatories for which they claim Defendants have not provided adequate responses. Pl. Op. Br., at 8-10. The interrogatories broadly fall into three categories: (i) Ube’s interrogatories 3 and 4 which rely on the same definition of “Subject Batteries” discussed above, and therefore suffer from the same issues discussed; (ii) Ube’s interrogatories 5 and 6 to which Defendants responded that documents would be produced from which the requested information could be determined; and (iii) Ube’s interrogatories 8-11 and AET’s interrogatories 9 and 10 which ask for facts relating to the identity of individuals knowledgeable about marketing and sales of Defendants’ batteries or products, or knowledge of the asserted patents. With respect to interrogatories for which Defendants relied on Rule 33(d), Plaintiffs’ complaint is premature as Defendants are still in the process of collecting the relevant documents. With respect to the third category of documents seeking specific information, Defendants intend to supplement their responses once they have gathered further information. IV. CONCLUSION For the foregoing reasons, Samsung respectfully requests that the Court deny Plaintiffs’ Motion to Compel. Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 11 of 13 11 Dated: December 5, 2018 Respectfully submitted, By: /s/ Janis Clements Janis Clements (State Bar No. 04365500) GREENBERG TRAURIG, LLP 300 West 6th Street, Suite 2050 Austin, TX 78701 Telephone: (512) 320-7200 Facsimile: (512) 320-7210 Email: clementsj@gtlaw.com Richard Edlin (admitted pro hac vice) Allan A. Kassenoff (admitted pro hac vice) Joshua L. Raskin (admitted pro hac vice) Michael H. Imbacuan (admitted pro hac vice) GREENBERG TRAURIG, LLP MetLife Building, 200 Park Avenue New York, NY 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 Email: edlinr@gtlaw.com kassenoffa@gtlaw.com raskinj@gtlaw.com imbacuanm@gtlaw.com Attorneys for Defendants Samsung SDI Co., Ltd., Samsung SDI America, Inc., Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc. Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 12 of 13 12 CERTIFICATE OF SERVICE The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court’s CM/ECF system per Local Rule CV-5(a)(3) on December 5, 2018. /s/ Janis Clements Janis Clements Case 1:17-cv-00030-LY Document 108 Filed 12/05/18 Page 13 of 13