Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-01090/USCOURTS-casd-3_17-cv-01090-2/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:0271 Patent Infringement

---

FY%$6%/0

81,7('67$7(6',675,&7&2857

6287+(51',675,&72)&$/,)251,$

$0(5,&$1*1&&25325$7,21

3ODLQWLII

Y

/*(/(&7521,&686$,1&/*

(/(&7521,&602%,/(&20086$,1&

$1'/*(/(&7521,&602%,/(5(6($5&+

86$//&

'HIHQGDQWV

&DVH1RFY%$6%/0

25'(5*5$17,1*,13$57$1'

'(1<,1*,13$573/$,17,))¶6

027,2172&203(/7(&+1,&$/)$&7

',6&29(5<$1'/*¶63$7(17

/,&(16($*5((0(176

>(&)1R@

&XUUHQWO\ EHIRUH WKH &RXUW LV 3ODLQWLII¶V 1RYHPEHU   3027,21 72 &203(/

7(&+1,&$/)$&7',6&29(5<$1'/*¶63$7(17/,&(16($*5((0(176 ́>(&)1R307& ́@

'HIHQGDQWV1RYHPEHURSSRVLWLRQWRWKHPRWLRQ>(&)1R32SSR ́@DQG3ODLQWLII¶V

1RYHPEHU5HSO\>(&)1R35HSO\ ́@

)RUWKHUHDVRQVVHWIRUWKEHORZ3ODLQWLII¶VPRWLRQLV*5$17(',13$57$1''(1,('

,13$57

5(/(9$17%$&.*5281'

2Q$XJXVW3ODLQWLIIVHQW'HIHQGDQWVLWV)LUVW6HWRI,QWHUURJDWRULHVDQG5HTXHVWV

IRU'RFXPHQWV35)3V ́07&DW$IWHUPHHWLQJDQGFRQIHUULQJVHYHUDOWLPHVLQFOXGLQJRQ

6HSWHPEHUDQG2FWREHUDQGDQG1RYHPEHU'HIHQGDQWVKDYHSURYLGHG

REDACTED

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 1 of 16

FY%$6%/0

IRXUVHWVRIREMHFWLRQVDQGUHVSRQVHVWRWKH5)3V,G

2Q2FWREHUFRXQVHOIRU3ODLQWLII$OLVRQ5LFKDUGVDQG$OH['HEVNLDQGFRXQVHO

'HIHQGDQWV 7KRPDV 'DYLV 5LFN 5DPER (OL]DEHWK &KLDYLHOOR &ROOLQ 3DUN DQG $ODQ :DQJ

FRQWDFWHGWKH&RXUWUHJDUGLQJYDULRXVGLVFRYHU\GLVSXWHVFRQFHUQLQJ'HIHQGDQWV¶UHVSRQVHVWR

ZULWWHQGLVFRYHU\,QUHJDUGWRWKHVHGLVSXWHVWKH&RXUWLVVXHGDEULHILQJVFKHGXOH(&)1R

2Q 2FWREHU   WKH SDUWLHV ILOHG D 3-2,17 027,21 72 02',)< &(57$,1

'($'/,1(6 ́(&)1R7KHSDUWLHVVRXJKWWRFRQWLQXHWKHGHDGOLQHIRU3ODLQWLIIWRILOH

LWV PRWLRQ WR 1RYHPEHU    'HIHQGDQWV¶ RSSRVLWLRQ WR 1RYHPEHU   DQG 

3ODLQWLII¶VUHSO\WR1RYHPEHUEHFDXVHWKH\PHWDQGFRQIHUUHGDQG3'HIHQGDQWVDJUHHG

WRSURYLGHDGGLWLRQDOGLVFRYHU\UHVSRQVHVE\2FWREHU>WKDW@PD\QDUURZWKHGLVFRYHU\

GLVSXWHVWKDWUHTXLUHWKH&RXUW¶VDWWHQWLRQ ́,GDW7KH&RXUWJUDQWHGWKHSDUWLHV¶PRWLRQRQ

2FWREHU(&)1R7KHSDUWLHVIDLOHGWRUHDFKDQDJUHHPHQWDQGWLPHO\ILOHGWKHLU

SOHDGLQJV6HH(&)1RVDQG

/(*$/67$1'$5'

7KHVFRSHRIGLVFRYHU\XQGHUWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHLVGHILQHGDVIROORZV

3DUWLHVPD\REWDLQGLVFRYHU\UHJDUGLQJDQ\QRQSULYLOHJHGPDWWHUWKDWLVUHOHYDQW

WR DQ\ SDUW\¶V FODLP RU GHIHQVH DQG SURSRUWLRQDO WR WKH QHHGV RI WKH FDVH

FRQVLGHULQJWKHLPSRUWDQFHRIWKHLVVXHVDWVWDNHLQWKHDFWLRQWKHDPRXQWLQ

FRQWURYHUV\ WKH SDUWLHV¶ UHODWLYH DFFHVV WR UHOHYDQW LQIRUPDWLRQ WKH SDUWLHV¶

UHVRXUFHVWKHLPSRUWDQFHRIWKHGLVFRYHU\LQUHVROYLQJWKHLVVXHVDQGZKHWKHU

WKHEXUGHQRUH[SHQVHRIWKHSURSRVHGGLVFRYHU\RXWZHLJKVLWVOLNHO\EHQHILW

,QIRUPDWLRQZLWKLQWKLVVFRSHRIGLVFRYHU\QHHGQRWEHDGPLVVLEOHLQHYLGHQFH

WREHGLVFRYHUDEOH

)HG5&LY3E

'LVWULFWFRXUWVKDYHEURDGGLVFUHWLRQWRGHWHUPLQHUHOHYDQF\IRUGLVFRYHU\SXUSRVHV6HH

+DOOHWWY0RUJDQ)GWK&LU'LVWULFWFRXUWVDOVRKDYHEURDGGLVFUHWLRQ

WR OLPLW GLVFRYHU\ WR SUHYHQW LWV DEXVH  6HH )HG 5 &LY 3 EFLLLLLQVWUXFWLQJ WKDW

FRXUWVPXVWOLPLWGLVFRYHU\ZKHUHWKHSDUW\VHHNLQJWKHGLVFRYHU\3KDVKDGDPSOHRSSRUWXQLW\

WR REWDLQ WKH LQIRUPDWLRQ E\ GLVFRYHU\ LQ WKH DFWLRQ ́ RU ZKHUH WKH SURSRVHG GLVFRYHU\ LV

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 2 of 16

FY%$6%/0

3XQUHDVRQDEO\FXPXODWLYHRUGXSOLFDWLYH ́ 3REWDLQ>DEOH@ IURPVRPHRWKHUVRXUFH WKDWLVPRUH

FRQYHQLHQWOHVVEXUGHQVRPHRUOHVVH[SHQVLYH ́RUZKHUHLW3LVRXWVLGHWKHVFRSHSHUPLWWHGE\

5XOHE ́

',6&866,21

3ODLQWLIIVHHNVDQRUGHUIURPWKH&RXUWUHTXLULQJ'HIHQGDQWVWRSURYLGH

XQHTXLYRFDOUHVSRQVHVWR$*1&¶V5)3VFRQVLVWHQWZLWK5XOHDVDPHQGHG

LQRUDQRUGHUWKDW/*¶VREMHFWLRQVDUHQRZZDLYHGQDUUDWLYHUHVSRQVHV

WR $*1&¶V LQWHUURJDWRULHV  ZKLFK VHHN WHFKQLFDO IDFW GLVFRYHU\ UHOHYDQW WR

LQIULQJHPHQW LVVXHV  /*¶V IDFWXDO EDVLV IRU DQ\ QRQLQIULQJHPHQW FRQWHQWLRQ

LQWHUURJDWRU\   DQ DQVZHU >WR@ LQWHUURJDWRU\  DQG  UHJDUGLQJ /*¶V

NQRZOHGJHDEOHZLWQHVVHVDQGD UHVSRQVH WRLQWHUURJDWRU\ WKDWLGHQWLILHV

WKHIXOOVFRSHRI/*¶VSULRUSDWHQWOLFHQVHV

07&DW3ODLQWLIIDUJXHVWKDW'HIHQGDQWV¶UHVSRQVHVWRLWV5)3VDUHQRWFOHDUDQGXQHTXLYRFDO

DQGLPSURSHUO\EHJLQZLWKWKHODQJXDJH36XEMHFWWRDQGZLWKRXWZDLYLQJWKHIRUHJRLQJ*HQHUDO

DQG 6SHFLILF REMHFWLRQV /*( UHVSRQGV DV IROORZV ́  ,G DW   3ODLQWLII IXUWKHU DUJXHV WKDW

'HIHQGDQWV¶LQWHUURJDWRU\UHVSRQVHVDUHLPSURSHUDV'HIHQGDQWVFDQQRWQDUURZO\LQWHUSUHW

3ODLQWLII¶V UHTXHVWV WR VXLW WKHLU RZQ QHHGV  FDQQRW DGGUHVV RQO\ WKUHH RI WKH ILIW\WKUHH

DFFXVHG SURGXFWV LQ WKHLU UHVSRQVHV  FDQQRW JLYH UHVSRQVHV LQGLFDWLQJ WKDW WKH\ KDYH

LQIRUPDWLRQEH\RQGWKDWFRQWDLQHGLQWKHGRFXPHQWVEXWZKLFKWKH\DUHQRWZLOOLQJWRSURYLGH

FDQQRWFODLPWKDWIDFWVDYDLODEOHWRWKHPDUHSULYLOHJHGGRQRWFOHDUO\H[SUHVVLIWKH\

KDYHSRVVHVVLRQFXVWRG\RUFRQWURORYHUWHFKQLFDOIDFWVIURPFRPSRQHQWVXSSOLHUVLGHQWLI\

RYHUSDJHVRIGRFXPHQWVZLWKRXWH[SODLQLQJKRZWKHGRFXPHQWVSURYLGHWKHLQIRUPDWLRQ

UHTXHVWHG LQ WKH LQWHUURJDWRU\  IDLO WR SURYLGH WKH IDFWXDO EDVLV IRU D QRQLQIULQJHPHQW

GHIHQVH DQG  IDLO WR QDPH DQ\ ZLWQHVVHV LQ UHVSRQVH WR LQWHUURJDWRULHV UHTXHVWLQJ

NQRZOHGJHDEOHZLWQHVVHV,GDW)LQDOO\3ODLQWLIIDUJXHVWKDW'HIHQGDQWV3VKRXOGSURGXFH

WKHIXOOVFRSHRI>WKHLU@SULRUSDWHQWOLFHQVHV ́DQGQRWOLPLWWKHSURGXFWLRQWRWKRVHOLFHQVHVLQ

7KH&RXUWLVXQFOHDURQWKHQXPEHURIDFFXVHGSURGXFWV3ODLQWLII¶VPRWLRQVWDWHVWKDWWKHUH

DUHILIW\WKUHHDFFXVHGSURGXFWV07&DW'HIHQGDQWV¶RSSRVLWLRQVWDWHVWKDWWKHUHDUH3RYHU

 ́ DFFXVHG SURGXFWV >VHH 2SSR DW @ DQG 3ODLQWLII¶V UHSO\ VWDWHV WKDW WKHUH DUH ILIW\RQH

DFFXVHGSURGXFWV5HSO\DW

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 3 of 16

FY%$6%/0

WKH3PRWLRQVHQVLQJSRVLWLRQVDQGQDYLJDWLRQILHOGRIDUW ́,GDW

'HIHQGDQWV UHVSRQG WKDW 3ODLQWLII LV DWWHPSWLQJ WR 3WXUQ WKH EXUGHQ RI SURYLQJ

LQIULQJHPHQWRQLWVKHDG ́2SSRDW'HIHQGDQWVDVVHUWWKDWWKHLUUHVSRQVHVIXOO\FRPSO\

ZLWK )HGHUDO 5XOH RI &LYLO 3URFHGXUH 3)HG 5 &LY 3 ́   WKH\ KDYH H[SODLQHG WKHLU

NQRZOHGJH ZLWK UHVSHFW WR LQWHUURJDWRULHV  DQG  LGHQWLILHG VXSSRUWLQJ GRFXPHQWV DQG

RIIHUHGWROHW3ODLQWLIILQVSHFWUHOHYDQWFRQILGHQWLDOGRFXPHQWVLQWKHLUFRQWUROWKHLVVXHRI

WKHLUSDWHQWOLFHQVHVLV SUHPDWXUH DQG 'HIHQGDQWV DUHQRWUHTXLUHG WRLGHQWLI\ WKHLU WULDO

ZLWQHVVHVDWWKLVMXQFWXUH,GDW

3ODLQWLIIUHSOLHVWKDW'HIHQGDQWV¶RSSRVLWLRQ3GHFOLQHVWRGLUHFWO\DGGUHVVQHDUO\DOORIWKH

VSHFLILFLVVXHV>3ODLQWLII@UDLVHVLQLWV0RWLRQ ́5HSO\DW3ODLQWLIIQRWHVWKDW'HIHQGDQWVIDLOHG

WR  FODLP WKDW WKH\ UHVSRQGHG WR 3ODLQWLII¶V LQWHUURJDWRULHV WR WKH H[WHQW RI WKHLU DYDLODEOH

NQRZOHGJHSURYLGHLQIRUPDWLRQRQWKHLUQRQLQIULQJHPHQWGHIHQVHVWDNHDSRVLWLRQRQ

WKHOLPLWVRIWKHLUNQRZOHGJHDQGZKDWLVRULVQRWLQWKHLUFRQWURODQGDFFHSWWKDWWKHUHDUH

GHDGOLQHVWKDWDSSO\WRWKHP,G

$ 3ODLQWLII¶V5HTXHVWVIRU3URGXFWLRQ

$ SDUW\PD\ UHTXHVW WKH SURGXFWLRQRI DQ\GRFXPHQWZLWKLQ WKHVFRSH RI5XOH E

)HG5&LY3D3)RUHDFKLWHPRUFDWHJRU\WKHUHVSRQVHPXVWHLWKHUVWDWHWKDWLQVSHFWLRQ

DQG UHODWHG DFWLYLWLHVZLOO EH SHUPLWWHG DV UHTXHVWHG RU VWDWHZLWK VSHFLILFLW\ WKH JURXQGV IRU

REMHFWLQJWRWKHUHTXHVWLQFOXGLQJWKHUHDVRQV ́,GDWE%7KHUHVSRQGLQJSDUW\LV

UHVSRQVLEOH IRU DOO LWHPV LQ 3WKH UHVSRQGLQJ SDUW\¶V SRVVHVVLRQ FXVWRG\ RU FRQWURO ́  ,G DW

D  $FWXDO SRVVHVVLRQ FXVWRG\ RU FRQWURO LV QRW UHTXLUHG  5DWKHU 3>D@ SDUW\PD\ EH

RUGHUHGWRSURGXFHDGRFXPHQWLQWKHSRVVHVVLRQRIDQRQSDUW\HQWLW\LIWKDWSDUW\KDVDOHJDO

ULJKW WR REWDLQ WKH GRFXPHQW RU KDV FRQWURO RYHU WKH HQWLW\ ZKR LV LQ SRVVHVVLRQ RI WKH

GRFXPHQW ́6RWRY&LW\RI&RQFRUG)5'1'&DO

3ODLQWLIIVHHNVVXSSOHPHQWDOUHVSRQVHVWRLWV5)3V0RWDW3ODLQWLIIDUJXHVWKDW

DOORI'HIHQGDQWV¶UHVSRQVHVEHJLQZLWKWKHSKUDVH36XEMHFWWRDQGZLWKRXWZDLYLQJWKHIRUHJRLQJ

*HQHUDODQG6SHFLILFREMHFWLRQV/*(UHVSRQGVDVIROORZV ́ZKLFKLVLPSURSHUXQGHUWKH)HGHUDO

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 4 of 16

FY%$6%/0

5XOHV RI &LYLO 3URFHGXUH  ,G DW    3ODLQWLII IXUWKHU DUJXHV WKDW 'HIHQGDQWV¶ SODFHPHQW RI

33UHOLPLQDU\5HVSRQVHV ́DWWKHEHJLQQLQJRILWVUHVSRQVHVVSHFLILFDOO\LGHQWLI\LQJIRXUUHDVRQV

IRUGRFXPHQWVEHLQJZLWKKHOGE\'HIHQGDQWVLVQRWDFFHSWDEOHEHFDXVHWKHUHDVRQVGLIIHUIURP

WKH REMHFWLRQV DQG UHVSRQVHV WKDW 'HIHQGDQWV SURYLGHG LQ UHVSRQVH WR WKH 5)3V  ,G DW 

3ODLQWLII VWDWHV WKDW WKH LQFRQVLVWHQW UHVSRQVHV GR QRW OHDYH LW ZLWK 3D FOHDU UHFRUG RI

>'HIHQGDQWV¶@REMHFWLRQVDQGUHVSRQVHV ́,G3ODLQWLIIUHTXHVWVWKDWWKH&RXUWGHHP'HIHQGDQWV¶

REMHFWLRQVZDLYHG,G

'HIHQGDQWVFRQWHQGWKDWWKHLUUHVSRQVHVWRWKH5)3VFRPSO\ZLWK)HG5&LY3DQG

FOHDUO\VHWRXW WKHLUREMHFWLRQVZKLFKPDWHULDOVDUHEHLQJSURGXFHGDQGZKLFKPDWHULDOVDUH

EHLQJZLWKKHOG2SSRDW'HIHQGDQWVDOVRFRQWHQGWKDW3ODLQWLIIIDLOVWRSURYLGHVXSSRUWIRU

LWVSRVLWLRQWKDWWKHSKUDVH36XEMHFWWRDQGZLWKRXWZDLYLQJWKHIRUHJRLQJ*HQHUDODQG6SHFLILF

REMHFWLRQV/*(UHVSRQGVDVIROORZV ́LVLPSURSHUXQGHU)HG5&LY3,GDW'HIHQGDQWV

QRWHWKDW3ODLQWLIIGRHVQRWFKDOOHQJHWKHREMHFWLRQVVSHFLILFDOO\DQGWKDW3ODLQWLII¶VDUJXPHQWRQ

ZDLYHULVXQDYDLOLQJDQGDJDLQVWUHFHQWSUHFHGHQWLQWKLVGLVWULFW

3ODLQWLIIUHSOLHVWKDW'HIHQGDQWV
REMHFWLRQVDQGVWDWHPHQWVDUHLQFRQVLVWHQWDQGSUHFOXGH

D FOHDU UHFRUG 5HSO\ DW   3ODLQWLII IXUWKHU UHSOLHV WKDW WKLV LV QRW D FDVH ZKHUH ILQGLQJ

'HIHQGDQWV
REMHFWLRQV WREHZDLYHGFRXOGEHFRQVLGHUHG 3DXWRPDWLF ́JLYHQ WKDW3ODLQWLIIKDV

EHHQUHTXHVWLQJUHVSRQVHVIRUVHYHUDOPRQWKV,G)LQDOO\3ODLQWLIIUHSOLHVWKDWLWLVXQDEOHWR

KDYHDPRUHVSHFLILFGLVFXVVLRQEHFDXVH'HIHQGDQWVKDYHSUHYHQWHG3ODLQWLIIIURPXQGHUVWDQGLQJ

'HIHQGDQWV¶SRVLWLRQDQGEHFDXVHWKH\KDYHQRWSURGXFHGDOORIWKHUHVSRQVLYHGRFXPHQWVLQ

WKHLUSRVVHVVLRQ,GDW

$V DQ LQLWLDO PDWWHU WKH &RXUW QRWHV WKDW 3ODLQWLII¶V REMHFWLRQV WR 'HIHQGDQWV¶ 5)3

UHVSRQVHVFHQWHUDURXQGWKHLGHDWKDW'HIHQGDQWV¶XVHRIWKHSKUDVH36XEMHFWWRDQGZLWKRXW

ZDLYLQJ WKH IRUHJRLQJ *HQHUDO DQG 6SHFLILF REMHFWLRQV /*( UHVSRQGV DV IROORZV ́ SULRU WR

UHVSRQGLQJ LV LQDSSURSULDWH XQGHU WKH )HGHUDO 5XOHV DQG VKRXOG UHVXOW LQ WKH ZDLYHU RI

'HIHQGDQWV¶REMHFWLRQV07&DW

:KLOH3ODLQWLIISURYLGHVFDVHODZ IURP WKLVGLVWULFWVXSSRUWLQJLWVDUJXPHQWV WKH&RXUW

GHFOLQHVWRILQGWKDW'HIHQGDQWV¶OLPLWLQJODQJXDJHUHVXOWVLQDZDLYHURIDOORIWKHLUREMHFWLRQV

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 5 of 16

FY%$6%/0

DQG3ODLQWLII¶VPRWLRQIRUVXFKDILQGLQJLV'(1,('6HH'HO6RFRUUR4XLQWHUR3HUH]Y8QLWHG

6WDWHV:/DW
6'&DO-DQVWDWLQJWKDWWKH3FDVHODZ3ODLQWLIIV

FLWHGRHVQRWVXSSRUWWKHLUFRQWHQWLRQWKDWERLOHUSODWHREMHFWLRQVUHVXOWLQDQDXWRPDWLFZDLYHU

EXWLQVWHDGVKRZVWKDWFRXUWVVXVWDLQDWKRURXJKDQDO\VLVRIWKHREMHFWLRQVEHIRUHGHWHUPLQLQJ

ZKHWKHURUQRWWKH\DUHRYHUUXOHG ́8QIRUWXQDWHO\IRU3ODLQWLII3ODLQWLIIGRHVQRWWKHQDGGUHVV

DQ\RIWKHVSHFLILFREMHFWLRQVRUOLPLWDWLRQVUDLVHGE\'HIHQGDQWV3ODLQWLIIPHUHO\DUJXHVWKDW

WKH 3VXEMHFW WR ́ ODQJXDJH VKRXOG UHVXOW LQ DOO REMHFWLRQV EHLQJ ZDLYHG  6LPLODUO\ 3ODLQWLII

FRPSODLQVWKDWWKHOLWDQ\RIREMHFWLRQVDQGOLPLWDWLRQVVHWIRUWKLQHDFK5)3PDNHLWGLIILFXOWWR

XQGHUVWDQGZKDW'HIHQGDQWLVSURGXFLQJEXWGRHVQRWLGHQWLI\DQ\VSHFLILFDUHDVRIFRQIXVLRQ

RU VSHFLILF FRQIXVLQJ RU FRQIOLFWLQJ REMHFWLRQV RU UHVSRQVHV  %HFDXVH WKH &RXUW KDV GHQLHG

3ODLQWLII¶V FRPSOHWH ZDLYHU DUJXPHQW DQG 3ODLQWLII GRHV QRW LGHQWLI\ DQG EULHI DQ\ VSHFLILF

GHILFLHQFLHV3ODLQWLIIKDVQRWVDWLVILHGLWVEXUGHQRUVHWIRUWKDGLVSXWHIRUWKLV&RXUWWRUHVROYH

6HH:RPDFNY9LUJD:/DW
('&DO'HF3>W@KHSDUW\VHHNLQJ

WKHPRWLRQ WR FRPSHO GLVFRYHU\ KDV WKH EXUGHQ RI LQIRUPLQJ WKH FRXUW ZK\ WKH GHIHQGDQWV

REMHFWLRQVDUHQRWMXVWLILHGRUZK\WKHGHIHQGDQWV
UHVSRQVHVDUHGHILFLHQW

%HFDXVHWKH&RXUWLVQRWGHHPLQJDOORI'HIHQGDQWV¶REMHFWLRQVZDLYHGDQG3ODLQWLIIKDV

QRW LGHQWLILHG DQ\ VSHFLILF 5)3 GLVSXWHV RU SURYLGHG ODZ LQ VXSSRUW RI LWV SRVLWLRQ UHJDUGLQJ

VSHFLILFREMHFWLRQVDQGUHVSRQVHVWRWKH5)3VWKH&RXUWGHFOLQHVWRLVVXHDQ\RUGHUVUHJDUGLQJ

VSHFLILF 5)3V H[FHSW DV WR 5)3V      DQG  'HIHQGDQWV VWDWH WKH\ ZLOO

VXSSOHPHQWWKHLUUHVSRQVHVWRWKHVH5)3VQRZWKDWDSURWHFWLYHRUGHUKDVEHHQHQWHUHGLQWKH

FDVH07&DW([K6SHFLILFDOO\'HIHQGDQWVDJUHHGWRUHVSRQGWRWKHUHTXHVWVZLWKLQWKLUW\

RUVL[W\GD\VDIWHUWKHHQWU\RIWKH3URWHFWLYH2UGHU,G7KH3URWHFWLYH2UGHUZDVHQWHUHGRQ

2FWREHU(&)1R7KLUW\GD\VIURP2FWREHUZDV1RYHPEHUDQG

VL[W\ GD\V IURP 2FWREHU   ZLOO EH'HFHPEHU    $FFRUGLQJO\'HIHQGDQWV DUH

RUGHUHGWRSURYLGHWKHLUVXSSOHPHQWDOUHVSRQVHVWR5)3VDQGRQRU

EHIRUH'HFHPEHU 

3ODLQWLII¶VVHFRQG DUJXPHQWLV WKDW'HIHQGDQWV¶3UHOLPLQDU\5HVSRQVHV±ZKLFKFRQWDLQ

IRXUJHQHUDOREMHFWLRQVWR3ODLQWLII¶VUHTXHVWV±DUHLQFRQVLVWHQWDQGGRQRWOHDYH3ODLQWLIIZLWKD

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 6 of 16

FY%$6%/0

FOHDUUHFRUGRIZKDWLVDQGLVQRWEHLQJSURGXFHG07&DW'HIHQGDQWV3UHOLPLQDU\5HVSRQVHV

VWDWHWKDWWKH\DUH

QRWSURGXFLQJGRFXPHQWVVRXUFHFRGHRURWKHULQIRUPDWLRQWKDWDUHVXEMHFWWR

RQH RUPRUH RI WKH IROORZLQJ LWV REMHFWLRQ WR WKH WLPH OLPLWDWLRQV LQ$*1&¶V

UHTXHVWVDJUHHPHQWVZLWKWKLUGSDUWLHVXQWLOWKRVHWKLUGSDUWLHVKDYHSURYLGHG

/*(ZLWKFRQVHQWWRSURGXFHGRFXPHQWVVRXUFHFRGHRURWKHULQIRUPDWLRQQRW

UHODWHG WR SURGXFWV VSHFLILFDOO\ DFFXVHG LQ $*1&¶V 6HSWHPEHU  ,QIULQJHPHQW

&RQWHQWLRQV DQGRU  WKH FRPPRQ LQWHUHVW SULYLOHJH RU DQ\ RWKHU DSSOLFDEOH

SULYLOHJHV

07&DW([KDW'HIHQGDQWVDUJXHWKDWWKHVHREMHFWLRQVDUHSURSHUDQGQHFHVVDU\

2SSRDW

:LWKUHJDUGWRWKHVHIRXUREMHFWLRQVWKH&RXUWILQGVWKDW'HIHQGDQWVPXVWVXSSOHPHQW

WKHLU UHVSRQVHV WR FODULI\ ZKDW WKH\ DUH SURGXFLQJ QRW SURGXFLQJ DQG ZLWKKROGLQJ  )RU

3UHOLPLQDU\5HVSRQVH'HIHQGDQWVPXVWVSHFLILFDOO\VWDWHWKHDSSOLFDEOHWLPHIUDPHWKDWWKH\

DUH XWLOL]LQJ IRU HDFK 5)3 UHVSRQVH  )RU 3UHOLPLQDU\ 5HVSRQVHV  DQG  'HIHQGDQWV PXVW

SURYLGH3ODLQWLIIZLWKDORJLGHQWLI\LQJZKLFKGRFXPHQWVDUHEHLQJZLWKKHOGEDVHGRQSULYLOHJH

DQGRU DJUHHPHQWV ZLWK WKLUG SDUWLHV  )LQDOO\ ZLWK UHJDUG WR 3UHOLPLQDU\ 5HVSRQVH 

'HIHQGDQWVPXVWSURGXFHVXSSOHPHQWDOUHVSRQVHVIRUDOODFFXVHGSURGXFWVQRWMXVWWKHWKUHH

UHSUHVHQWDWLYHSURGXFWVLGHQWLILHGE\3ODLQWLIILQLWVLQIULQJHPHQWFRQWHQWLRQV+RZHYHULQOLJKW

RI3ODLQWLII¶VGHFLVLRQWRJURXSWKHDFFXVHGSURGXFWVEDVHGRQLWVRUJDQL]DWLRQRILWVLQIULQJHPHQW

WKHRULHVDQG3ODLQWLII¶VIDLOXUHWRSURYLGHLQGLYLGXDOFKDUWVDVUHTXLUHGXQGHU3DWHQW/RFDO5XOH

F'HIHQGDQWVPD\SURYLGHWKHLUUHVSRQVHVLQNLQGDQGVHUYHUHSUHVHQWDWLYHUHVSRQVHVLQ

DFFRUGDQFH ZLWK WKH WKUHH UHSUHVHQWDWLYH FKDUWV SURYLGHG E\ 3ODLQWLII RU DQRWKHU DSSURSULDWH

PDQQHURI UHSUHVHQWDWLYHJURXSLQJRISURGXFWV DQG UHVSRQVHV 'HIHQGDQWVPXVWVHUYH WKHLU

VXSSOHPHQWDOUHVSRQVHVE\'HFHPEHU

7KH&RXUWLVDZDUHWKDW'HIHQGDQWVDSSHDUWRKDYHGRQHWKLVIRUPRVWRIWKHLUUHVSRQVHVE\

VWDWLQJWKDWWKHLUUHVSRQVHVDUHDGGUHVVLQJ$FFXVHG3URGXFWVVROGLQWKH8QLWHG6WDWHVEHWZHHQ

0D\DQG-XO\07&DW([K+RZHYHULIWKHUHDUHDQ\UHVSRQVHVWKDWGRQRWKDYH

WKLVLQIRUPDWLRQDQGIRUDQ\VXSSOHPHQWDOUHVSRQVHV'HIHQGDQWVPXVWVSHFLI\WKHWLPHIUDPH

EHLQJFRYHUHGE\WKHUHVSRQVHV

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 7 of 16

FY%$6%/0

% ,QWHUURJDWRULHV

$QLQWHUURJDWRU\PD\UHODWHWRDQ\PDWWHUWKDWPD\EHLQTXLUHGXQGHU5XOHE)HG

5 &LY 3 D  37KH JURXQGV IRU REMHFWLQJ WR DQ LQWHUURJDWRU\ PXVW EH VWDWHG ZLWK

VSHFLILFLW\>DQG@>D@Q\JURXQGQRWVWDWHGLQDWLPHO\REMHFWLRQLVZDLYHGXQOHVVWKHFRXUWIRU

JRRGFDXVHH[FXVHVWKHIDLOXUH ́)HG5&LY3E$Q\LQWHUURJDWRU\QRWREMHFWHGWR

PXVW EH DQVZHUHG IXOO\ LQ ZULWLQJ XQGHU RDWK )HG 5 &LY 3 E  ,Q DQVZHULQJ

LQWHUURJDWRULHVSURSRXQGHGWRDFRUSRUDWLRQSDUWQHUVKLSDVVRFLDWLRQRUJRYHUQPHQWDODJHQF\

WKHRIILFHURUDJHQWUHVSRQGLQJRQLWVEHKDOI3PXVWIXUQLVKWKHLQIRUPDWLRQDYDLODEOHWRWKHSDUW\ ́

)HG5&LY3E%VHHDOVR&DO3UDF*XLGH)HG&LY3UR%HIRUH7ULDO&K,9%

)HG5&LY3GVWDWHVWKDW3>L@IWKHDQVZHUWRDQLQWHUURJDWRU\PD\EHGHWHUPLQHGE\

H[DPLQLQJDXGLWLQJFRPSLOLQJDEVWUDFWLQJRUVXPPDUL]LQJDSDUW\
VEXVLQHVVUHFRUGVLQFOXGLQJ

HOHFWURQLFDOO\VWRUHGLQIRUPDWLRQDQGLIWKHEXUGHQRIGHULYLQJRUDVFHUWDLQLQJWKHDQVZHUZLOO

EHVXEVWDQWLDOO\WKHVDPHIRUHLWKHUSDUW\WKHUHVSRQGLQJSDUW\PD\DQVZHUE\VSHFLI\LQJWKH

UHFRUGVWKDWPXVWEHUHYLHZHGLQVXIILFLHQWGHWDLOWRHQDEOHWKHLQWHUURJDWLQJSDUW\WRORFDWHDQG

LGHQWLI\WKHPDVUHDGLO\DVWKHUHVSRQGLQJSDUW\FRXOG ́

 ,QWHUURJDWRULHV1RV

3ODLQWLIIVHHNVVXSSOHPHQWDOUHVSRQVHVWR,QWHUURJDWRULHV1RV07&DW3ODLQWLII

DUJXHVWKDW'HIHQGDQWVUHVSRQVHVWKXVIDUKDYHDQXPEHURISUREOHPVLQFOXGLQJWKDWWKH\

LPSURSHUO\ DWWHPSW WR QDUURZ WKH VFRSH RI WKH UHTXHVW WR WKLUG SDUW\ LQIRUPDWLRQ RQO\ 

LPSURSHUO\ DWWHPSW WR QDUURZ WKH VFRSH RI WKH UHTXHVW WR WKUHH RI WKH ILIW\WKUHH DFFXVHG

SURGXFWVGRQRWFOHDUO\VWDWHWKDWWKHWHFKQLFDOIDFWVDYDLODEOHWR'HIHQGDQWVDUHOLPLWHGWR

WKHIDFHRIWKHGRFXPHQWVRUDOWHUQDWLYHO\SURYLGHWKHWHFKQLFDOIDFWVDYDLODEOHWR'HIHQGDQWV

LPSURSHUO\ZLWKKROGIDFWXDOLQIRUPDWLRQDVSULYLOHJHGZLWKRXWH[SODLQLQJWKHJURXQGVIRUWKH

SULYLOHJHOHDYHXQFOHDUZKHWKHURUQRW'HIHQGDQWVKDYHSRVVHVVLRQFXVWRG\RUFRQWURORYHU

WHFKQLFDOIDFWVIURPLWVFRPSRQHQWVXSSOLHUVDQGLPSURSHUO\UHIHUHQFHPRUHWKDQVL[WHHQ

WKRXVDQGSDJHVRIGRFXPHQWVZLWKRXWH[SODLQLQJKRZWKHGRFXPHQWVSURYLGHWKHLQIRUPDWLRQ

UHTXHVWHGLQWKHLQWHUURJDWRU\,G

'HIHQGDQWV FRQWHQG WKDW WKH LQWHUURJDWRULHV DUH UHTXHVWLQJ GHWDLOHG WHFKQLFDO

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 8 of 16

FY%$6%/0

GRFXPHQWDWLRQDQGLQIRUPDWLRQWKDW'HIHQGDQWVGRQRWSRVVHVVRUDVWDWHPHQWWKDW'HIHQGDQWV

NQRZ QRWKLQJ DERXW WKH WRSLFV DQG DUH DQ DWWHPSW WR VKLIW WKH EXUGHQ RI GLVFRYHU\ RQWR

'HIHQGDQWV 2SSR DW 'HIHQGDQWV IXUWKHUFRQWHQG WKDW3ODLQWLII¶VFODLP WKDW'HIHQGDQWV

KDYHFRQWURORYHUYDULRXVWKLUGSDUWLHVLVEDVHOHVV,GDW'HIHQGDQWVQRWHWKDWWKH\DUHLQ

WKH SURFHVV RI SURGXFLQJ  SDJHV RI FRQILGHQWLDO WKLUG SDUW\ GRFXPHQWV QRZ WKDW WKH

3URWHFWLYH2UGHULVLQSODFH,G'HIHQGDQWVFRQWHQGWKDW3ODLQWLII¶VLQIULQJHPHQWFRQWHQWLRQV

DUHGHILFLHQWDQGWKDWWKH\DUHQRW3ZLWKKROGLQJPDWHULDOVRWKHUWKDQWKHSULYLOHJHGLQIRUPDWLRQ

WKDWLVQRWVXEMHFW WRGLVFRYHU\ ́ ,GDW )LQDOO\'HIHQGDQWVFRQWHQG WKDW WKHVL[WHHQ

WKRXVDQGSDJHVUHIHUHQFHGE\3ODLQWLIIZHUHQRWSDUWRID3KHDS ́DVWKHGRFXPHQWVPDGHXS

DURXQG  WHFKQLFDOPDQXDOV DQG WKLUW\ GDWD VKHHWV  ,G DW  'HIHQGDQWV QRWH WKDW WKH

UHVSRQVHV FRPSO\ ZLWK )HG 5 &LY 3 G DQG 3ODLQWLII¶V LQWHUSUHWDWLRQ RI )DFH'RXEOH LV

PLVSODFHG,G

3ODLQWLII UHSOLHV WKDW 'HIHQGDQWV IDLO WR DGGUHVV WKH OLPLWDWLRQV RQ WKH VFRSH RI WKH

LQWHUURJDWRULHV DQG LPSURSHUO\ FDWHJRUL]H WKH LQWHUURJDWRULHV DV FRQWHQWLRQ LQWHUURJDWRULHV

5HSO\DW3ODLQWLIIIXUWKHUUHSOLHVWKDW'HIHQGDQWVVWLOOUHIXVHWR3HLWKHUDFNQRZOHGJH>WKH\@

KDYHQRUHVSRQVLYHLQIRUPDWLRQRUWRGLYXOJHWKHUHVSRQVLYHLQIRUPDWLRQ>WKH\@SRVHVV>@ ́,G

DW  HPSKDVLV LQ RULJLQDO  )LQDOO\ 3ODLQWLII UHSOLHV WKDW 'HIHQGDQWV LPSURSHUO\ WUHDW WKH

LQWHUURJDWRU\ UHTXHVWV DV GRFXPHQW UHTXHVWV DQG IDLO WR DGGUHVV WKDW WKH EXUGHQ LV RQ

'HIHQGDQWVWRVKRZWKDWWKHGRFXPHQWVWKH\KDYHFLWHGWRFRQWDLQWKHLQIRUPDWLRQEHLQJVRXJKW

,GDW

1RZ WKDW WKHUH LV D SURWHFWLYH RUGHU LQ SODFH 'HIHQGDQWV PXVW VXSSOHPHQW WKHLU

UHVSRQVHV WR LQFOXGH LQIRUPDWLRQ VXEMHFW WR WKH 3URWHFWLYH 2UGHU  0RUHRYHU WKH &RXUW KDV

UHYLHZHG 'HIHQGDQWV¶ UHVSRQVHV DQG ILQGV WKDW WKH\ DUH LQVXIILFLHQW  'HIHQGDQWV PXVW

VXSSOHPHQWWKHLUUHVSRQVHVE\DQVZHULQJWKHTXHVWLRQDVNHGUHVSRQGLQJDVWRDOOILIW\

WKUHHDFFXVHGSURGXFWVDQGLGHQWLI\LQJWKHZLWKKHOGLQIRUPDWLRQDQGSULYLOHJHLIDUHVSRQVH

LVLQFRPSOHWHGXH WRDSULYLOHJH )RUH[DPSOH,QWHUURJDWRULHVDQGDVN'HIHQGDQWV WR

GHVFULEHVSHFLILFSURFHVVHV'HIHQGDQWV¶UHVSRQVH

'HIHQGDQWVPXVWGHVFULEHZKDWWKH\NQRZ

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 9 of 16

FY%$6%/0

6LPLODUO\,QWHUURJDWRULHVDQGDVNKRZ$FFXVHG3URGXFWVXVH,08VDQG'HIHQGDQWVUHVSRQG

$JDLQWKLVLVLQVXIILFLHQW'HIHQGDQWVPXVWSURYLGHDUHVSRQVH

WR 3ODLQWLII¶V UHTXHVW DV ZULWWHQ  'HIHQGDQWV PXVW VXSSOHPHQWWKHLU UHVSRQVHV RQ RU EHIRUH

'HFHPEHU    'HIHQGDQWV PXVW SURYLGH DOO UHVSRQVLYH LQIRUPDWLRQ WKDW LV LQ WKHLU

SRVVHVVLRQFXVWRG\RUFRQWURO

 ,QWHUURJDWRU\1R

3ODLQWLII VHHNV D VXSSOHPHQWDO UHVSRQVH WR ,QWHUURJDWRU\ 1R   07& DW   3ODLQWLII

DUJXHVWKDW'HIHQGDQWVVKRXOGEHUHTXLUHGWR3GLVFORVHDQ\IDFWXDOEDVLVWKDWLWKDVIRUDQ\QRQ

LQIULQJHPHQWGHIHQVH ́3ODLQWLIIQRWHVWKDWGHVSLWHKDYLQJVHUYHGWKHLQWHUURJDWRU\RQ$XJXVW

'HIHQGDQWVKDYH IDLOHG WRGLVFORVHDQ\EDVLV IRU WKHLUQRQLQIULQJHPHQWGHIHQVHRUDQ\

RWKHUH[SODQDWLRQIRUWKHLUFRQWHQWLRQVWKDWDFODLPHOHPHQWLVQRWPHW,G3ODLQWLIIDUJXHVWKDW

WKLVLQIRUPDWLRQVKRXOGEHGLVFORVHGLPPHGLDWHO\DVWKHWLPHIRUFODLPFRQVWUXFWLRQH[FKDQJHV

QHDUV,GDW

,QWHUURJDWRU\1RDVNV

)RUHDFKOLPLWDWLRQRIWKHDVVHUWHGFODLPVRIWKH3DWHQWVLQ6XLWVWDWHWKHFRPSOHWH

IDFWXDO EDVLV IRU 'HIHQGDQWV¶ FRQWHQWLRQ WKDW HDFK $FFXVHG 3URGXFW GRHV QRW

LQIULQJHWKDWHOHPHQWH[SODLQLQJLQGHWDLOWKHIDFWXDODQGOHJDOEDVLVIRUHDFKVXFK

FRQWHQWLRQDQGLGHQWLI\LQJE\%DWHVQXPEHUGRFXPHQWVVXIILFLHQWWRVXSSRUWHDFK

VXFKFRQWHQWLRQ

,GVHHDOVR([K 'HIHQGDQWV UHVSRQGE\H[SODLQLQJ WKDW3ODLQWLIISURYLGHG

VRWKH\RQO\DUHSURYLGLQJUHVSRQVHVDVWRWKRVHWKUHHSURGXFWV

07&DW([KDW'HIHQGDQWVFRQWHQGWKDWWKHLUUHVSRQVHVDUHDSSURSULDWH3JLYHQWKDW

3ODLQWLIIUHIXVHVWRSURYLGH>WKHP@ZLWK,QIULQJHPHQW&RQWHQWLRQVWKDWDUHFRPSOLDQWZLWK3DWHQW

/5 ́2SSRDW'HIHQGDQWVQRWHWKDW3ODLQWLIILVDFFXVLQJRYHUILIW\SURGXFWVEXW

KDVRQO\SURYLGHG'HIHQGDQWVZLWKFODLPFKDUWVIRUWKUHHSKRQHVUHQGHULQJWKHLULQIULQJHPHQW

FKDUWVLQDGHTXDWHDQGOLPLWLQJ'HIHQGDQWV¶DELOLW\WRUHVSRQGWRWKHLQWHUURJDWRU\,GDW

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 10 of

 16

FY%$6%/0

'HIHQGDQWV DOVR QRWH WKDW DGGLWLRQDO GHWDLOV 3UHJDUGLQJ QRQLQIULQJHPHQW ZLOO EH IRUWKFRPLQJ

EDVHGRQ3ODLQWLII¶VWKLUGSDUW\VXESRHQDV ́,GDW

3ODLQWLII UHSOLHV WKDW LWV LQIULQJHPHQW FRQWHQWLRQV GR QRW LPSDFW 'HIHQGDQWV¶ DELOLW\ WR

SURYLGH IDFWXDOLQIRUPDWLRQDQG WKDW WKHUHLVQRUHDVRQ WROLPLW IDFWGLVFRYHU\ WR WKUHHRIWKH

ILIW\RQH DFFXVHG SURGXFWV  ,G DW   3ODLQWLII IXUWKHU UHSOLHV WKDW LWV GHFLVLRQ WR XVH

UHSUHVHQWDWLYHFKDUWVIRUWKHLQIULQJHPHQWFRQWHQWLRQVLVWKHPRVWHIILFLHQWZD\WRSURFHHGDQG

WKDWWKLV&RXUWKDVDOORZHGUHSUHVHQWDWLYHFKDUWVLQRWKHUVLPLODUFLUFXPVWDQFHV,GDW

3ODLQWLII¶VPRWLRQWRFRPSHOIXUWKHUUHVSRQVHWR,QWHUURJDWRU\1RLV*5$17('3>$@

FRQWHQWLRQLQWHUURJDWRU\GXULQJWKHHDUO\VWDJHVRIOLWLJDWLRQLVDSSURSULDWHZKHUHWKHUHVSRQVHV

WRWKHLQWHUURJDWRU\ZRXOG3FRQWULEXWHPHDQLQJIXOO\ ́WRFODULI\LQJWKHLVVXHVLQWKHFDVH

QDUURZLQJWKHVFRSHRIWKHGLVSXWHVHWWLQJXSHDUO\VHWWOHPHQWGLVFXVVLRQRUSURYLGLQJ

DVXEVWDQWLDOEDVLVIRUDPRWLRQXQGHU5XOHRU5XOH ́)DFHGRXEOH,QFY)DFHFRP,QF

:/DW
±6'&DO)HE&RXUWVKDYHIRXQGWKDWLWLVDSSURSULDWHWR

KDYHDGHIHQGDQWUHVSRQGWRDQRQLQIULQJHPHQWFRQWHQWLRQLQWHUURJDWRU\ZKHUHDSODLQWLIIKDV

SURYLGHG LWV LQIULQJHPHQW FRQWHQWLRQV ZLWK FRUUHVSRQGLQJ FODLP FKDUWV WKDW FDQ DOORZ WKDW

GHIHQGDQW WR UHVSRQGDFFRUGLQJO\  ,G +HUHZKLOH3ODLQWLIIKDVRQO\VHUYHGFODLPFKDUWV IRU

WKUHH RI WKH ILIW\ SOXV SURGXFWV WKDW LW DFFXVHV WKH SDUWLHV¶ GHDGOLQHV IRU ILOLQJ ,QYDOLGLW\

&RQWHQWLRQV3UHOLPLQDU\&ODLP&RQVWUXFWLRQVDQG5HVSRQVLYH&ODLP&RQVWUXFWLRQVKDYHSDVVHG

(&)1R7KHUHIRUHLWLVXQOLNHO\WKDW'HIHQGDQWGRHVQRWKDYHHQRXJKLQIRUPDWLRQWRVWDWH

LWV QRQLQIULQJHPHQW FRQWHQWLRQV  6HH $XGDWH[ 1 $P ,QF Y 0LWFKHOO ,QW
O ,QF  :/

DW
±6'&DO2FWILQGLQJWKDWWKHQRQLQIULQJHPHQWLQWHUURJDWRU\ZDV

QRWSUHPDWXUHZKHUHWKHFDVHKDGEHHQSHQGLQJIRURYHUWZRDQGDKDOI\HDUVDQGWKHSDUWLHV

KDYH H[FKDQJHG LQIULQJHPHQW DQG LQYDOLGLW\ FRQWHQWLRQV SUHOLPLQDU\ DQG UHVSRQVLYH FODLP

FRQVWUXFWLRQ FRQWHQWLRQV DQG VXSSRUWLQJ GRFXPHQWDWLRQ ́ FLWLQJ )DFHGRXEOH ,QF :/

DW
DIWHULQIULQJHPHQWFRQWHQWLRQVDQGVXSSRUWLQJGRFXPHQWVZHUHVHUYHGDQGFODLP

FRQVWUXFWLRQSRVLWLRQVZHUHNQRZQ3'HIHQGDQWFDQQRWDVVHUW WKDWLWGRHVQRWKDYHVXIILFLHQW

LQIRUPDWLRQ WR IRUPXODWH LWV QRQLQIULQJHPHQW FRQWHQWLRQV ́0RUHRYHU'HIHQGDQWV GR QRW

DUJXHWKDWWKH\GRQRWKDYHVXIILFLHQWLQIRUPDWLRQWRUHVSRQGZLWKUHJDUGWRDOOSURGXFWVWKH\

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 11 of

 16

FY%$6%/0

PHUHO\DUJXHWKDWWKH\VKRXOGQRWKDYHWRGRVREHFDXVH3ODLQWLIIKDVQRWDGGUHVVHGDOOILIW\

RQH DFFXVHG SURGXFWV  $OVR ZKLOH WKH\ FRPSODLQ DERXW 3ODLQWLIIV¶ LQDGHTXDWH LQIULQJHPHQW

FKDUWV'HIHQGDQWVGLGQRWILOHDPRWLRQFKDOOHQJLQJWKHDGHTXDF\RI3ODLQWLII¶VUHSUHVHQWDWLYH

VDPSOHRULWVIDLOXUHWRDGGUHVVDOODFFXVHGSURGXFWV

'HIHQGDQWVPXVW VXSSOHPHQW WKHLU UHVSRQVH WR DGGUHVV DOO SURGXFWV RU UHSUHVHQWDWLYH

SURGXFWVLGHQWLI\LQJZKLFKSURGXFWVDUHLQHDFKUHSUHVHQWDWLYHJURXS'HIHQGDQWV¶UHVSRQVHV

PXVWEHVHUYHGRQRUEHIRUH-DQXDU\

 ,QWHUURJDWRULHV1R±

3ODLQWLIIVHHNVDVXSSOHPHQWDO UHVSRQVH WR ,QWHUURJDWRU\1R 07&DW 3ODLQWLII

DUJXHVWKDW'HIHQGDQWVIDLOWRLGHQWLI\DVLQJOHZLWQHVVLQUHVSRQVHWR,QWHUURJDWRU\1RZKLFK

DVNV

,GHQWLI\DOOZLWQHVVHV'HIHQGDQWVHLWKHUZLOORUPD\FDOODWWULDOWKHJHQHUDOVXEMHFW

PDWWHU RI WKHLU WHVWLPRQ\ ZKHWKHU WKH\ DUH UHSUHVHQWHG E\ FRXQVHO DQG WKHLU

FRQWDFWLQIRUPDWLRQLQFOXGLQJWHOHSKRQHQXPEHUDQGDGGUHVV

,GVHHDOVR([K'HIHQGDQWV¶UHVSRQGHGWRWKHLQWHUURJDWRU\E\VWDWLQJ

,GDW([K

3ODLQWLII¶VPRWLRQWRFRPSHOIXUWKHUUHVSRQVHWR,QWHUURJDWRU\LV'(1,(''HIHQGDQWV

FRQWHQG WKDW WKH\ KDYH QRW \HW LGHQWLILHG WKHLU ZLWQHVVHV DQG KDYH UHVSRQGHG WR WKH

LQWHUURJDWRULHVE\

  %HFDXVH WKH &DVH 0DQDJHPHQW 2UGHU

5HJXODWLQJ'LVFRYHU\ DQG2WKHU3UHWULDO 3URFHHGLQJV >(&)1R @ RQO\LVVXHG D IHZPRQWKV

DJRDQGWKH&RXUWKDVQRW\HWVHWDIDFWRUH[SHUWGLVFRYHU\GHDGOLQHLQWKLVPDWWHU'HIHQGDQWV¶

UHVSRQVHLVQRWXQUHDVRQDEOH3ODLQWLII¶VFRQFHUQWKDWWKH\ZLOOEHDPEXVKHGZLWKWKHLGHQWLW\

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 12 of

 16

FY%$6%/0

RI VHYHUDO ZLWQHVVHV RQ WKH HYH RI WULDO LV XQIRXQGHG DQG SUHPDWXUH  &RQWUDU\ WR 3ODLQWLII¶V

SRVLWLRQWKLVLVQRWWKHVFHQDULRGHVFULEHGLQ6NHUWLFKY=DOH&RUS)G
WK&LU

ZKHUH3DIWHUWKHFORVHRIGLVFRYHU\WKH6NHUWLFKVDWWHPSWHGWRVXSSOHPHQWWKHLUOLVWRI

WULDOZLWQHVVHVZLWKVRPHWZHQW\ILYHQHZQDPHV ́RU$PDGRUY%XOO\
V6SRUWV%DU	*ULOO

:/DW
'1HY)HEZKHUHSDUW\VRXJKWWRGLVFORVHWULDOZLWQHVVHVIRUWKH

ILUVWWLPH3RQWKHHYHRIWKHGLVFRYHU\FXWRII ́DQGWKHFRXUWVWUXFNWKHZLWQHVVHV ́07&DW

,QDGGLWLRQ)HG5&LY3D%VWDWHVWKDWSDUWLHVPXVWSURYLGHWKHFRQWDFWLQIRUPDWLRQ

IRU ZLWQHVVHV WKDW PD\ EH FDOOHG LI QRW SUHYLRXVO\ SURYLGHG DORQJ ZLWK ZLWQHVVHV WKH SDUW\

DQWLFLSDWHV GHSRVLQJ 3DW OHDVW  GD\V EHIRUH WULDO ́ XQOHVV WKH&RXUW RUGHUV RWKHUZLVH +HUH

'HIHQGDQWVDUHQRZKHUHQHDUWKH3GD\VEHIRUHWULDO ́GHDGOLQHDVQRWULDOGDWHKDVEHHQVHW

DQGWKH&RXUWKDV\HWWRLVVXHDVFKHGXOLQJRUGHUZLWKSUHWULDOGHDGOLQHVSDVWWKHSRLQWRIWKH

FODLPFRQVWUXFWLRQKHDULQJ$FFRUGLQJO\3ODLQWLII¶VSRVLWLRQWKDWLWVKRXOGQRWEHIRUFHGWRZDLW

DQ\ORQJHUIRUWKLVLQIRUPDWLRQLVQRWUHDVRQDEOH

:LWKUHVSHFWWR,QWHUURJDWRU\1R3ODLQWLIIQRWHVWKDW'HIHQGDQWV¶UHVSRQVHDJDLQIDLOV

WRLGHQWLI\DQ\ZLWQHVVHVIURP'HIHQGDQWVZLWKDQ\WHFKQLFDONQRZOHGJH,G3ODLQWLIIDUJXHV

WKDW'HIHQGDQWVLQLWLDOGLVFORVXUHVGRQRWVDWLVI\)HG5&LY3DQG WKDWLWVKRXOGQRWEH

UHTXLUHGWRZDLWDQ\ORQJHUIRUWKHUHTXLUHGLQIRUPDWLRQ,GDW,QWHUURJDWRU\1R

DVNV

,GHQWLI\WKHSHRSOHPRVWNQRZOHGJHDEOHRWKHUWKDQOLWLJDWLRQFRXQVHOUHJDUGLQJ

WKHVXEMHFWPDWWHURIWKLVOLWLJDWLRQRU'HIHQGDQWV¶FRQWHQWLRQVDVZHOODVHDFK

DQGHYHU\SHUVRQZKRSURYLGHGDQ\LQIRUPDWLRQXVHGRUFRQVLGHUHGLQSUHSDULQJ

'HIHQGDQWV¶UHVSRQVHWRLQWHUURJDWRULHVLQ WKLVFDVHDQGDQ\RWKHUSHUVRQVZKR

KDYH NQRZOHGJH RI DQ\ RQH RU PRUH RI WKH IDFWV RU FRQWHQWLRQV VHW IRUWK LQ

'HIHQGDQWV¶UHVSRQVHWRWKDWLQWHUURJDWRU\DQGIRUHDFKSHUVRQVWDWHWKHVXEMHFW

PDWWHURIWKDWSHUVRQ¶VNQRZOHGJH

,GDW([K'HIHQGDQWVUHVSRQGHG

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 13 of

 16

FY%$6%/0

,G'HIHQGDQWVFRQWHQGWKDWWKH\ZLOOLGHQWLI\WKHLUZLWQHVVHVODWHULQWKHFDVHDVSHUPLWWHGE\

WKH )HGHUDO5XOHV RI&LYLO 3URFHGXUH WKH/RFDO5XOHV DQG WKH&RXUW¶V 2UGHUV  2SSR DW 

'HIHQGDQWVQRWHWKDW3ODLQWLIIIDLOVWRFLWHDQ\DXWKRULW\LQVXSSRUWRILWVSRVLWLRQWKDW'HIHQGDQWV

PXVWLGHQWLI\DOORIWKHLUZLWQHVVHVOHVVWKDQQLQHW\GD\VDIWHUVHUYLQJWKHLULQLWLDOGLVFORVXUHV

,GDW'HIHQGDQWVDVNWKDW3ODLQWLII¶VUHTXHVWUHJDUGLQJWULDOZLWQHVVHVEHGHQLHG,GDW

3ODLQWLIIUHSOLHVWKDWLWZRXOGEHLQHIILFLHQWDQGSUHMXGLFLDOWRDOORZ'HIHQGDQWV3WRZDLW

XQWLODPRQWKRUVREHIRUHWULDOWRILQGRXW ́ZKLFKIDFWZLWQHVVHVZLOOEHNQRZOHGJHDEOHDQGZKR

'HIHQGDQWVSODQWRUHO\RQDWWULDO5HSO\DW

3ODLQWLII PRWLRQ WR FRPSHO IXUWKHU UHVSRQVH WR ,QWHUURJDWRU\ 1R  LV '(1,('

'HIHQGDQWVKDYHSURYLGHGVRPHQDPHVDQGWLWOHVLQWKHLU,QLWLDO'LVFORVXUHV:KLOH'HIHQGDQWV

IDLO WR SURYLGH QDPHV DQG FRQWDFW LQIRUPDWLRQ IRU DOO RI WKH SHRSOH GHVFULEHG LQ WKHLU ,QLWLDO

'LVFORVXUHV WKH\ DUH DOUHDG\ UHTXLUHG WR VXSSOHPHQW WKHLU UHVSRQVHV 3LQ DWLPHO\PDQQHULI

WKH>\@OHDUQ>@WKDWLQVRPHPDWHULDOUHVSHFWWKHGLVFORVXUHRUUHVSRQVHLVLQFRPSOHWHRULQFRUUHFW

DQGLIWKHDGGLWLRQDORUFRUUHFWLYHLQIRUPDWLRQKDVQRWRWKHUZLVHEHHQPDGHNQRZQWRWKHRWKHU

SDUWLHVGXULQJWKHGLVFRYHU\SURFHVVRULQZULWLQJ ́)HG5&LY3H,QDGGLWLRQ3ODLQWLII¶V

UHTXHVWDVZULWWHQLVRYHUEURDG

 ,QWHUURJDWRU\1R

3ODLQWLIIVHHNVDUHVSRQVHWR,QWHUURJDWRU\1RZKLFKUHTXHVWVWKDW'HIHQGDQWV

,GHQWLI\HDFK3DWHQW/LFHQVH$JUHHPHQWWRZKLFKDQ\/*(QWLW\LVDSDUW\LQZKLFK

DQ\ SDWHQW OLFHQVHG UHODWHV WR WHFKQRORJ\ UHODWHG WR PRELOH SKRQHV ODSWRSV

WDEOHWV RU VPDUWZDWFKHV E\ %DWHV QXPEHU DQG H[SODLQ'HIHQGDQWV¶ FRQWHQWLRQ

DERXWDQ\UR\DOW\UDWHSHUGHYLFHHJSKRQHRUUDWHSHUSDWHQWRUDQ\RWKHU

UR\DOW\ UDWH UHIOHFWHG LQ DQ\ RI WKH LGHQWLILHG 3DWHQW /LFHQVH $JUHHPHQWV

LQFOXGLQJIRUH[DPSOH/*¶VDJUHHPHQWVZLWK4XDOFRPP1RNLD*RRJOH9LD&RUH

:LUHOHVV&RQYHUVDQWHWF

07&DW 3ODLQWLIIDUJXHV WKDW'HIHQGDQWVKDYHQRW3SURGXFHGQRULGHQWLILHGDVLQJOHSULRU

0DQ\ RI WKH GHVFULSWLRQV VWDWH 3>R@QH RUPRUH SHUVRQV IURP >@ZKRPD\ KDYH LQIRUPDWLRQ

UHODWLQJWR>@ ́LQVWHDGRIOLVWLQJDQDFWXDOQDPHRUFRQWDFWLQIRUPDWLRQRWKHUWKDQDFRPSDQ\

QDPHZKHUHWKHLQGLYLGXDOZRUNHG07&DW([K

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 14 of

 16

FY%$6%/0

SDWHQWOLFHQVH ́,G3ODLQWLIIIXUWKHUDUJXHVWKDW'HIHQGDQWVKDYHVWDWHGWKDWWKH\SODQWROLPLW

WKH LQWHUURJDWRU\ WR OLFHQVHV LQ WKH 3PRWLRQ VHQVLQJ SRVLWLRQLQJ DQG QDYLJDWLRQ ILHOG RI DUW ́

ZKLFKLVRYHUO\ UHVWULFWLYH  ,G 3ODLQWLII DUJXHV WKDW'HIHQGDQWVVKRXOGSURGXFH WKHLU 3PXOWL

SDWHQWDQGSRUWIROLRZLGHOLFHQVHV ́DQGWKDW'HIHQGDQWVKDYHQRWVKRZQWKDWUHVSRQGLQJWRWKH

UHTXHVWZRXOGEHXQGXO\EXUGHQVRPH,GDW

'HIHQGDQWVH[SODLQWKDWWKH\KDYHDJUHHGWRSURGXFHDOOUHOHYDQWOLFHQVHDJUHHPHQWVEXW

WKDW GXH WR WKHLU VL]H DQG WKH ODUJH QXPEHU RI OLFHQVHV WKH VFRSH RI WKH VHDUFK VKRXOG EH

QDUURZHG  2SSR DW   'HIHQGDQWV FRQWHQG WKDW 3ODLQWLII¶V REMHFWLRQ WR WKHLU SURSRVHG

QDUURZLQJFRQIOLFWVZLWK3ODLQWLII¶VRZQYHULILHGGHILQLWLRQRIWKHILHOGRIDUW,GDW)LQDOO\

'HIHQGDQWVFRQWHQGWKDW3ODLQWLII¶VPRWLRQWRFRPSHOWKHSURGXFWLRQRIOLFHQVHLVSUHPDWXUHDQG

VKRXOGEHGHQLHG,GDW

3ODLQWLIIUHSOLHVWKDW'HIHQGDQWV¶RSSRVLWLRQIDLOVWRVWDWHZK\LWVKRXOGQRWSURYLGHOLFHQVHV

UHODWLQJ 3WR DQ\ RI WKH /* SURGXFW FRPSRQHQWV WKDW DUH LQYROYHG LQ SURYLGLQJ WKH UHOHYDQW

IXQFWLRQV LQ WKLV FDVH ́ RU LWVPXOWLSDWHQW DQG SRUWIROLRZLGHOLFHQVHV  5HSO\ DW    3ODLQWLII

UHLWHUDWHV WKDWD3IXOOVFRSHRI UHOHYDQWOLFHQVHVVKRXOGEHSURGXFHG ́DQG WKDWDWDPLQLPXP

'HIHQGDQWV VKRXOG UHVSRQG LGHQWLI\LQJ 3WKH FRXQWHUSDUW\ WKH SDWHQW WHFKQRORJ\ WKH UR\DOW\

GROODUDPRXQWDQGWKHGDWHVRWKDWSRWHQWLDOUHOHYDQFHFDQEHGHWHUPLQHG ́,GDW

3ODLQWLII¶VPRWLRQ WRFRPSHO IXUWKHU UHVSRQVH WR ,QWHUURJDWRU\1RLV*5$17(',1

3$573ODLQWLII¶VUHTXHVWLVRYHUEURDGDVLWDFNQRZOHGJHVVLQFHLWPHUHO\VWDWHVWKDWLWEHOLHYHV

WKDW   'HIHQGDQWV¶ PXOWLSDWHQW DQG SRUWIROLRZLGH OLFHQVHV DUH 3OLNHO\ >WR@ LQFOXGH SDWHQWV

GLUHFWHG WR UHOHYDQWSKRQH IHDWXUHVDQG IXQFWLRQDOLWLHV ́ 07&DW 'HIHQGDQWV WKHUHIRUH

PD\OLPLWWKHLUUHVSRQVHWRWKHLQWHUURJDWRU\WRWKH3PRWLRQVHQVLQJSRVLWLRQLQJDQGQDYLJDWLRQ ́

,QUHVSRQVHWRWKDWFRQWHQWLRQ3ODLQWLIIVWDWHVWKDWWKHGHILQLWLRQ'HIHQGDQWVDUHUHIHUULQJWR

3ZDV SURYLGHG LQ D GLIIHUHQW OHJDO FRQWH[W DQG DGGUHVVHV D GLIIHUHQW OHJDO LVVXH WKH OHYHO RI

RUGLQDU\VNLOOLQWKHUHOHYDQWDUWLVYHU\GLIIHUHQWIURPWKHVFRSHRISDWHQWOLFHQVHVWKDWPD\EH

UHOHYDQWWRWKLVFDVH1RWDEO\/*¶VSURSRVHGILHOGRIDUWLVPXFKQDUURZHUWKDWZKDW/*SURSRVHG

LQ WKH FRQWH[W RI LWV UHTXHVW IRU D SURVHFXWLRQ EDU DQG DFTXLVLWLRQ EDU LQ LWV SURWHFWLYH RUGHU

PRWLRQZKLFKZDV3PRWLRQVHQVLQJSRVLWLRQLQJPDSSLQJDQGQDYLJDWLRQWHFKQRORJ\ ́0RWDW

Q

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 15 of

 16

FY%$6%/0

ILHOGRIDUW,GDW'HIHQGDQWVPXVWVXSSOHPHQWWKHLUUHVSRQVHRQRUEHIRUH-DQXDU\

&21&/86,21

3ODLQWLII¶V UHTXHVW WR KDYH 'HIHQGDQWV¶ REMHFWLRQV ZDLYHG LV '(1,('  5HJDUGLQJ

'HIHQGDQWV¶33UHOLPLQDU\5HVSRQVHV ́'HIHQGDQWVPXVWVSHFLILFDOO\VWDWHWKHDSSOLFDEOHWLPH

IUDPHWKDWWKH\DUHXWLOL]LQJIRUHDFK5)3UHVSRQVHSURYLGH3ODLQWLIIZLWKDORJLGHQWLI\LQJ

ZKLFKGRFXPHQWVDUHEHLQJZLWKKHOGEDVHGRQSULYLOHJHDQGRUDJUHHPHQWVZLWKWKLUGSDUWLHV

DQG  PXVW SURGXFH VXSSOHPHQWDO UHVSRQVHV IRU DOO DFFXVHG SURGXFWV QRW MXVW WKH WKUHH

UHSUHVHQWDWLYHSURGXFWVLGHQWLILHGE\3ODLQWLIILQLWVLQIULQJHPHQWFRQWHQWLRQVDOWKRXJKWKH\PD\

SURYLGH UHSUHVHQWDWLYH UHVSRQVHV WR WKH UHSUHVHQWDWLYH FKDUWV'HIHQGDQWVPXVW VHUYH WKHLU

VXSSOHPHQWDOUHVSRQVHVE\'HFHPEHU 

3ODLQWLII¶VPRWLRQWRFRPSHOVXSSOHPHQWDOUHVSRQVHVWR

 5)3V      DQG  LV*5$17('  'HIHQGDQWV DUH RUGHUHG WR

SURYLGH WKHLU VXSSOHPHQWDO UHVSRQVHV WR 5)3V      DQG  RQ RU EHIRUH

'HFHPEHU 

 ,QWHUURJDWRU\1RLV*5$17(''HIHQGDQWVPXVWVXSSOHPHQWWKHLUUHVSRQVHV

RQRUEHIRUH-DQXDU\

 ,QWHUURJDWRULHV 1R  LV *5$17('  'HIHQGDQWV PXVW VXSSOHPHQW WKHLU

UHVSRQVHVRQRUEHIRUH'HFHPEHU

 ,QWHUURJDWRULHV1RDQGLV'(1,('

 ,QWHUURJDWRU\ 1R  LV *5$17(' ,1 3$57  'HIHQGDQWV PD\ OLPLW WKHLU

UHVSRQVHVWR WKH3PRWLRQVHQVLQJSRVLWLRQLQJDQGQDYLJDWLRQ ́ILHOGRIDUW'HIHQGDQWVPXVW

VXSSOHPHQWWKHLUUHVSRQVHRQRUEHIRUH-DQXDU\

,7,66225'(5('

'DWHG

Case 3:17-cv-01090-BAS-BLM Document 71 Filed 12/18/17 PageID.<pageID> Page 16 of

 16