Traxcell Technologies, LLC v. Huawei Technologies USA Inc.

REPLY to Response to Motion re MOTION to Compel underlying Financial Documents

E.D. Tex.March 6, 2019

i UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS MARSHALL DIVISION TRAXCELL TECHNOLOGIES, LLC., ) Plaintiff, ) ) Civil Action No. 2:17-cv-00042 v. ) (Lead Case) ) ) HUAWEI TECHNOLOGIES USA INC., ) JURY TRIAL DEMANDED Defendant. ) ) PLAINTIFF’S REPLY IN SUPPORT OF MOTION TO COMPEL DEFENDANTS TO PRODUCE UNDERLYING FINANCIAL DOCUMENTS AND ITEMS Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 1 of 7 PageID #: 38593 1 I. ARGUMENT A. FACTS JUSTIFYING A MOTION TO COMPEL ARE UNDISPUTED. Defendants’ Response in effect argues: (1) we (Nokia) didn’t have a duty to produce relevant financial information until 2019; (2) we (Nokia) didn’t know what financial documents are relevant in a patent litigation case; and (3) our (Nokia’s) 51-page production of 2017–2018 documents are all the financial information we (Nokia) have relating to the systems accused of infringing. Undisputed facts refute those arguments. Specifically, it is undisputed that: 1. more than 16 months ago (now 19 months), this Court’s August 8, 2017 Discovery Order1 required the parties to produce all documents and electronically stored information relevant to the pled claims;2 2. the purported financial information Nokia asserts as its complete financial production3 was served by Nokia more than 17 months after this Court’s Discovery Order ordered full production of all relevant information4 and consists of a mere 51 pages;5 3. the patent-infringement statute of limitations is six years6 and this civil action was filed in January 2017;7 4. Nokia’s purported full-financial-information-production of 51 pages pertains only to 1 ECF No. 32. 2 Contrast Plaintiff’s Motion to Compel Defendants Nokia Solutions and Networks US LLC and Nokia Solutions and Networks Oy to Produce Underlying Financial Documents and Items (“Motion”) at 1 with Defendants’ Opposition to Motion to Compel (“Response”), generally. In fact, Defendants’ Response utterly fails to even mention this Court’s Discovery Order and Nokia’s obligations thereunder. 3 Response (ECF No. 284) at 1; ECF No. 284-1 (identifying 51-page Bates number range). 4 Response (ECF No. 284) at 4 (citing Exh. 1 [2019-02-06 Production Letter]; ECF No. 284-1 (2019-02-06 Production Letter). 5 2019-02-06 Production Letter (ECF No. 284-1) (identifying 51-page Bates number range). 6 35 U.S.C. § 286. 7 Plaintiff’s Original Complaint for Patent Infringement (ECF No. 1). Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 2 of 7 PageID #: 38594 2 2017–2018;8 i.e., Nokia has not produced any financial information for any period of time that preceded the filing of this civil action; 5. Plaintiff is entitled to not just financial summaries but also the underlying financial information;9 6. Nokia has documents that underly the 51 pages Nokia has produced;10 7. despite this Court’s August 8, 2017 Discovery Order, for Nokia’s SON products Nokia has failed to produce financial information relating to profits, costs, development costs, and sales price and, for associated products and services, failed to produce revenue, profit, cost, development, and sales-price financial information;11 8. Nokia has failed to produce invoices, orders, and other financial information identifying the number of base stations licensed to use Nokia’s SON products, despite the fact that the number of base stations licensed is how Nokia charges customers for the software;12 9. on July 25, 2018, Plaintiff requested the following financial documents and information: 8 Response (ECF No. 284) at 2, 4. Without evidentiary citation or proof, Nokia’s Response erroneously asserts 2017–2018 is the relevant damages period (Response [ECF No. 284] at 2, 8) apparently because Nokia falsely argues, “In Traxcell’s damages report, Plaintiff’s damages expert contends the damages for this case began in January 2017” (id. at 4 n.4). Not only does Nokia provide no evidentiary support for that argument, it is false. Further, Nokia cannot argue it limited its 51-page financial-information production to 2017–2018 in reliance on the Traxcell damages-expert report because Nokia’s 51-page production preceded the expert report (thus, explaining why the report focused on 2017–2018 financial information though not asserting damages are limited to that period). Lastly, Traxcell’s damages expert is not an expert on patent law—specifically the patent statute of limitations—nor has personal personal knowledge regarding when Nokia first began using, manufacturing, offering for sale, selling, or exporting the items in question. 9 Contrast Motion (ECF No. 277) at 1, 2, 5 with Response (ECF No. 284), generally. 10 Exhibits 5, 6, 8 (all filed under seal) to Motion; Response (ECF No. 284) at 2. 11 Contrast Motion (ECF No. 277) at 2 (requesting an order for such information) with Response (ECF No. 284), generally and particularly at 2 (admitting the only financial information Nokia has produced is invoices and purchase orders for all U.S. customers “who have paid to use” Eden-Net SON modules in 2017 or 2018). 12 Contrast Motion (ECF No. 277) at 2–3 (complaining of Nokia’s failure to produce and requesting Nokia be ordered to produce such information) with Response (ECF No. 284), generally and particularly at 2 (admitting the only financial information Nokia has produced is invoices and purchase orders for all U.S. customers “who have paid to use” Eden-Net SON modules in 2017 or 2018). Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 3 of 7 PageID #: 38595 3 ;[13] 10. Nokia’s Response does not assert that Nokia has produced the above-described financial documents and information;14 11. Nokia has not produced financial information regarding, e.g., manufacture of the items in question;15 12. Nokia has not produced financial information from any marketing or sales departments;16 13. Plaintiff’s Interrogatory No. 6 requests (in addition to revenue) costs-incurred and profits-received information—on a product-by-product basis—for (in addition to sales) use and export: 13 Contrast Motion (ECF No. 277) at 9–10 and filed-under-seal Exh. 4 thereto with Response (ECF No. 284), generally. 14 Response (ECF No. 284), generally. 15 Response (ECF No. 284), generally and particularly at 2 (admitting the only financial information Nokia has produced is invoices and purchase orders for all U.S. customers “who have paid to use” Eden-Net SON modules in 2017 or 2018). 16 Id. Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 4 of 7 PageID #: 38596 4 ;[17] and 14. Nokia has not produced costs-incurred and profits-received information—on a product- by-product basis or any other basis—for use and export.18 B. DEFENDANTS’ WE-DIDN’T-HAVE-A-DUTY-TO-PRODUCE-RELEVANT- FINANCIAL-INFORMATION-UNTIL-2019 ARGUMENT FAILS. Since at least this Court’s August 8, 2017 Discovery Order, Defendants have had a duty to produce all financial information relating to the accused systems.19 Further, Plaintiff has been trying since 2017 to get Defendants to comply with that ordered duty.20 17 ECF No. 289-9 at 6. 18 Response (ECF No. 284), generally and particularly at 2 (admitting the only financial information Nokia has produced is invoices and purchase orders for all U.S. customers “who have paid to use” Eden-Net SON modules in 2017 or 2018). 19 See the above undisputed fact no. 1and evidentiary citation thereto. 20 ECF No. 277-3 (reflecting Plaintiff’s Requests for Production); filed-under-seal Exh. 4 to Motion (the Exhibit showing Plaintiff’s July 2018 attempt—including identifying detailed types of financial information that Defendants do not address in Defendants’ Response—to get Defendants to produce financial information). Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 5 of 7 PageID #: 38597 5 C. DEFENDANTS’ WE-DIDN’T-KNOW-WHAT-FINANCIAL-DOCUMENTS-ARE- RELEVANT-IN-A-PATENT-LITIGATION-CASE21 ARGUMENT FAILS. Since at least this Court’s August 8, 2017 Discovery Order, Defendants have not requested clarification from the Court regarding what financial documents are relevant in this patent-litigation case. Further, since 2017 Plaintiffs have been asking for specific types of financial documents,22 none of which Defendants address in Defendants’ Response. Further, the evidence refutes Defendants’ argument that Plaintiff purportedly failed to meet and confer or try to resolve this dispute without court intervention.23 Further, not addressing the merits would not be an appropriate sanction (if Plaintiff’s attempts to resolve the dispute were sanctionable, which they are not) and letting Defendant gain litigation advantage by ignoring its duty under the Discovery Order and Plaintiff’s requests for financial information would simply reward rewarding Defendants’ gamesmanship. D. DEFENDANTS’ OUR-51-PAGE-PRODUCTION-OF-2017–2018-DOCUMENTS- ARE-ALL-THE-FINANCIAL-INFORMATION-WE-HAVE-RELATING-TO- THE-ACCUSED-SYSTEMS ARGUMENT FAILS. Defendants cannot seriously contend their 51-page production of 2017–2018 (i.e., post- lawsuit filing) documents are all financially-related documents relating to the accused systems. Further, the patent-litigation statute of limitations and Defendants’ 51-page production show Defendants have failed to produce all financial documents relevant to Plaintiff’s patent- infringement claims.24 21 I.e., Defendants’ argument that until Plaintiff’s identified types of financial information Defendants could not know what financial information the Court’s Discovery Order required Defendants to produce. 22 ECF No. 277-3 (reflecting Plaintiff’s Requests for Production); filed-under-seal Exh. 4 to Motion (the Exhibit showing Plaintiff’s July 2018 attempt—including identifying detailed types of financial information that Defendants do not address in Defendants’ Response—to get Defendants to produce financial information). 23 E.g., filed-under-seal Exh. 4 to Motion (the Exhibit showing Plaintiff’s July 2018 attempt—including identifying detailed types of financial information that Defendants do not address in Defendants’ Response—to get Defendants to produce financial information); ECF Nos. 277-5, 284-2. 24 See the above undisputed facts nos. 3–14 and evidentiary citations thereto. Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 6 of 7 PageID #: 38598 6 Respectfully submitted, Ramey & Schwaller, LLP By: /s/ William P. Ramey, III William P. Ramey, III Texas Bar No. 24027643 5020 Montrose Blvd., Suite 750 Houston, Texas 77006 (713) 426-3923 (telephone) (832) 900-4941 (fax) wramey@rameyfirm.com Hicks Thomas, LLP John B. Thomas (Co-Counsel) Texas Bar No. 19856150 700 Louisiana Street, Suite 2000 Houston, Texas 77002 (713) 547-9100 (telephone) (713) 547-9150 (fax) jthomas@hicks-thomas.com Attorneys for Traxcell CERTIFICATE OF SERVICE Pursuant to the Federal Rules of Civil Procedure and Local Rule CV-5, I hereby certify that all counsel of record who have appeared in this case are being served today, March 5, 2019, with a copy of the foregoing via the Court's CM/ECF system. /s/ William P. Ramey, III William P. Ramey, III Case 2:17-cv-00042-RWS-RSP Document 292 Filed 03/06/19 Page 7 of 7 PageID #: 38599