Source: http://www.groklaw.net/articlebasic.php?story=20130622024224822
Timestamp: 2019-04-20 23:11:46+00:00

Document:
Now that we know that the FTC is interested in whether patent trolls' business practices are hurting competition and is planning to investigate, I thought I'd point out something I found interesting in a recent motion for a protective order [PDF] by Intellectual Ventures' CEO Nathan Myhrvold in a dispute with Lodsys, the patent troll trying to sue multiple companies and Apple app developers in two of the Lodsys litigations in Texas, Lodsys v. Brother International Corp. et al. and Lodsys v. Combay, Inc., et al.. The dispute is being handled separately, as Myhrvold v. Lodsys Inc et al, in Washington State, docketed as 2:13-mc-00088-RSL. The presiding judge is Robert S. Lasnik, hence the RSL in the docket line.
Myhrvold's lawyer has filed a Declaration in Support, as well some exhibits [PDF], one of them under seal. Myhrvold's trying to avoid a deposition by Lodsys, and the battle over it has been going on since last October.
From these documents, I learned that the patents Lodsys is using to sue everyone did indeed come from Intellectual Ventures, as we had heard, but there was a middle man, fellow patent troll Webvention LLC. This isn't the first time we've seen Webvention in the news going after multiple victims with goofy, broad-stroke patents it got from IV. Anyway, IV sold the patents Lodsys is using to Webvention first, and Webvention then sold them to Lodsys. Lodsys has some questions it would like Myhrvold to answer about all that.
He also allegedly had some conversations with Bill Gates that they'd like to ask him about, and there is an email to Gates and others at Microsoft dealing with "combinations" that they say came from Myhrvold's email account that they are interested in asking him about. Finally, there is an IV license with Microsoft that Lodsys would like more information about.
Me, too, and I hope the FTC will feel the same. A subpoena from the FTC would be harder to avoid complying with than one from Lodsys.
The whole deposition thing might just be theater, as far as the Lodsys cases are concerned and nothing may come of it, but if the FTC wants to send subpoenas, this might be a handy little map to one corner of the IV world.
Lodsys’ counsel has represented that there are three reasons why a deposition of Dr. Myhrvold is necessary. First, Lodsys contends the email with beginning Bates IV-LODSYS000347 was sent from Dr. Myhrvold’s email account and Lodsys should be allowed to question him about this email. Second, Lodsys claims a deposition of Dr. Myhrvold is necessary to ask him about conversations he had with Bill Gates regarding the scope of nonparty Microsoft’s license with IV. Third, Lodsys claims that it can ask Dr. Myhrvold about the acquisition of the Patents, because such a deal would have required Dr. Myhrvold’s approval. (Ward Decl. at ¶ 9) None of these reasons justifies Dr. Myhrvold’s deposition. IV has already provided multiple document productions and it has provided a Rule 30(b)(6) deposition of Peter Detkin, a co-founder of IV, with knowledge about all issues relevant to the Cases. All of Lodsys’ questions should have been asked at IV’s 30(b)(6) deposition or are other otherwise irrelevant.
Mr. Detkin is a lawyer who IV sent to represent it, and it's his deposition extracts that are sealed. What we do know is that he has claimed that the email sent from Dr. Myhrvold's account was actually drafted by him and another attorney, and he testified at length at his deposition about the email. Myhrvold would have nothing to add, his lawyers claim. And as for the patents, the acquisition of them and the sale thereafter to Webvention, Detkin testified about that already. And the conversations with Gates? Myhrvold's position is that Lodsys hasn't provided any evidence that any such conversations ever happened.
Well. No doubt Dr. Myhrvold could establish that one way or another if he is deposed, one must assume.
Lodsys further claims a deposition of Dr. Myhrvold is necessary to ask him about oral conversations he had with nonparty Bill Gates regarding the scope of nonparty Microsoft’s license with IV. As an initial matter, Lodsys has produced no evidence that any such conversations ever took place. None of the emails produced by IV suggest that Dr. Myhrvold had any oral conversations with Mr. Gates regarding the scope of Microsoft’s license. Lodsys has not met its burden in demonstrating Dr. Myhrvold is likely to have any knowledge of these issues, let alone “unique personal knowledge of relevant facts.” See Kelly v. Microsoft Corp., 2008 WL 5000278, at *1. Moreover, these alleged conversations are completely irrelevant. The only license at issue in the Cases is between Apple and IV. Microsoft is not a party to the Cases and its license is completely irrelevant. Conversations between two nonparties about a license not at issue are parole evidence and should be excluded from evidence by this Court. See Reif v. CNA, 248 F.R.D. at 454 (preventing an “apex” deposition when there was no nexus between the deponent’s knowledge and the issues in the case).
Additionally, IV has already testified that the scope of its license with its licensees (including Apple and nonparty Microsoft) to their downstream customers is determined by the doctrines of implied license and patent exhaustion. (Ward Decl., Ex. 11 (Detkin Depo.) at 27:24-28:4) Dr. Myhrvold’s conversations with a nonparty are completely irrelevant to the application of these doctrines. In fact, Mr. Detkin testified that IV chooses not to define the scope of “combination” rights in its licenses but instead to rely on common law. Id. Lodsys ignores this clear testimony and insists that nonparty conversations between Dr. Myhrvold and Bill Gates about IV’s license with Microsoft—a license that is NOT at issue—will somehow usurp the relevant contract between IV and Apple or the sworn testimony of IV’s 30(b)(6) deponent. Such information is not relevant, nor does it justify the high burden implicit in deposing Dr. Myhrvold. See Fed. R. Civ. P. 26(b)(1), (b)(2)(C)(iii).
Dr. Myhrvold is not a party to the Cases and has no knowledge of the patent claims at issue. Dr. Myhrvold is the Founder and CEO of IV and maintains a busy professional schedule, down to the hour, that requires frequent domestic and international travel. Taking even a few hours of Dr. Myhrvold’s time for this deposition would present a great burden on IV and Dr. Myhrvold personally.
Incidentally, if you are curious about Webvention, this memorandum and order from a Maryland case will tell you their story. The short version is the patent they were using, in the Lodsys style of suing everyone and his dog, was for tooltips functionality, where when you hover over a link it gives you more information. Yes. That. Anyway, the judge ordered a stay until the USPTO can complete a reexamination, and that's where that stands now. And there is a request [PDF] by a group of the Lodsys targets -- Electronic Arts Inc., Hewlett-Packard Company, Hoovers, Inc., Motorola Mobility LLC, Lenovo (United States) Inc., Novell, Inc., Quickoffice, Inc., Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC, and Symantec Corporation -- in Lodsys v. Brother asking for permission to file a partial summary judgment motion [PDF] of invalidity with respect to 28 of the 60 plus claims at issue, as a result of non-final USPTO decisions of invalidity during the ongoing reexamination of the claims, and due to finding some prior art the USPTO didn't have initially. I thought you might be interested in the prior art, which is why I mention it. As for Lodsys, this case is still in discovery.
Lodsys is prosecuting multiple lawsuits in the Eastern District of Texas for alleged infringement of patents that were once owned by Intellectual Ventures (“IV”), but are now owned by Lodsys. The Defendants in the Cases make “apps” that are available in Apple’s iTunes store. Apple intervened in the action to assert the argument that its license with IV grants rights that provide coverage to Apple’s app developers. Lodsys disagrees. IV has no view about whether Lodsys or Apple is correct; that is a matter of contract law, the specific claims at issue, and the specifics of the claims as read on each accused product. IV is not involved in the Cases and it has no knowledge of the foregoing issues that would address the dispute between Apple and Lodsys.
Dr. Myhrvold is not a party to the Cases and has no knowledge of the patent claims at issue. Dr. Myhrvold is the Founder and CEO of IV and maintains a busy professional schedule, down to the hour, that requires frequent domestic and international travel. Taking even a few hours of Dr. Myhrvold’s time for this deposition would present a great burden on IV and Dr. Myhrvold personally. If Dr. Myhrvold is going to be subjected to a deposition in the Cases, then good cause should be shown for it. Plaintiff cannot make any such showing, especially where, as here, Plaintiff has already had ample opportunity to obtain the requested information at the deposition of IV’s 30(b)(6) designee from high ranking executive Peter Detkin.
In the Cases, Lodsys has asserted patents that were previously owned by IV (the “Patents”). IV sold the Patents to a company called Webvention LLC, who subsequently sold them to Lodsys. Lodsys sued the Defendants, who develop applications for Apple’s products. Apple intervened in the Cases on Defendants’ behalf.
Apple obtained a license to certain patents owned by IV’s patent funds, including the Patents. Apple continued to be licensed to the Patents after IV’s sale to Webvention, LLC. It is IV’s understanding that in the Cases Apple contends that its license with IV to the Patents extends via so-called “combination” rights to allegedly infringing activities of the Defendants. Lodsys disagrees. Purportedly because of this dispute, the Parties in the Cases subpoenaed IV to ostensibly shed light on the Apple/IV license. However, Lodsys does not plan to ask Dr. Myhrvold any questions about IV’s license with Apple, the license at issue in the Cases. Instead, Lodsys now attempts to use its subpoena to obtain inadmissible and irrelevant parole evidence about oral conversations between nonparties regarding the scope of IV’s license with nonparty Microsoft.
IV has made it clear in discovery, and informally, that IV’s view is that the question of whether or not Apple’s App developers are covered by Apple’s license to the Patents is not specifically addressed by the language of IV’s license to Apple; rather it is a matter of patent law, specifically whether the doctrines of implied license and patent exhaustion as applied to the specific claims at issue provide rights to the named Defendants who are Apple App developers. The applicability of the doctrines of implied license and patent exhaustion in the Cases are specific to the Apple/IV license, fact-specific with respect to the interoperation of Apples iTunes store and the accused Apple products, and claim-specific to the asserted claims as they have been interpreted by the Court. Whether the doctrines of implied license or patent exhaustion apply in the Cases as to the accused products under the asserted claims is not dependent on the lay opinions of IV or its CEO.
may be considered by the court in weighing the burdens imposed in the circumstances.” Katz v. Batavia Marine & Sporting Supplies, Inc., 984 F.2d 422, 424 (Fed. Cir. 1993); see also Wapato Heritage, LLC v. Evans, CV-07-0314-EFS, 2009 WL 720956 (E.D. Wash. Mar. 17, 2009) (“Rule 45(c)(1) requires the Court to protect persons subject to a subpoena duces tecum from undue burden or expense. This duty is at its apex where non-parties are subpoenaed.”); Moore v. Weinstein Co., LLC, 3:09-CV-166, 2011 WL 2746247, *3 (M.D. Tenn. July 12, 2011) (“the ‘apex doctrine’ has been used to shield high-level corporate officials from unnecessary or burdensome depositions, especially for non-parties”).
Lodsys’ counsel has represented that there are three reasons why a deposition of Dr.Myhrvold is necessary. First, Lodsys contends the email with beginning Bates IV-LODSYS000347 was sent from Dr. Myhrvold’s email account and Lodsys should be allowed to question him about this email. Second, Lodsys claims a deposition of Dr. Myhrvold is necessary to ask him about conversations he had with Bill Gates regarding the scope of nonparty Microsoft’s license with IV. Third, Lodsys claims that it can ask Dr. Myhrvold about the acquisition of the Patents, because such a deal would have required Dr. Myhrvold’s approval. (Ward Decl. at ¶ 9) None of these reasons justifies Dr. Myhrvold’s deposition. IV has already provided multiple document productions and it has provided a Rule 30(b)(6) deposition of Peter Detkin, a co-founder of IV, with knowledge about all issues relevant to the Cases. All of Lodsys’ questions should have been asked at IV’s 30(b)(6) deposition or are other otherwise irrelevant.
the second section of that email dealing with “combinations.” However, Lodsys already extensively questioned IV’s Rule 30(b)(6) designee, Peter Detkin, about this email. Mr. Detkin informed Lodsys that the relevant section on “combinations” was actually drafted primarily by him and another attorney, not Dr. Myhrvold. (Ward Decl., Ex. 11 (Detkin Depo.) at 45:13-46:5, 62:9-19) Mr. Detkin also testified for nearly an hour about the content of this document. Any questions about this section were properly directed to Mr. Detkin, and Lodsys has not met its burden in demonstrating Dr. Myhrvold is likely to have “unique personal knowledge of relevant facts” relating to this document. See Kelly v. Microsoft Corp., 2008 WL 5000278, at *1. Lodsys’ failure to exhaust this questioning with Mr. Detkin cannot be the basis for a deposition of IV’s CEO.
GATES Lodsys further claims a deposition of Dr. Myhrvold is necessary to ask him about oral conversations he had with nonparty Bill Gates regarding the scope of nonparty Microsoft’s license with IV. As an initial matter, Lodsys has produced no evidence that any such conversations ever took place. None of the emails produced by IV suggest that Dr. Myhrvold had any oral conversations with Mr. Gates regarding the scope of Microsoft’s license. Lodsys has not met its burden in demonstrating Dr. Myhrvold is likely to have any knowledge of these issues, let alone “unique personal knowledge of relevant facts.” See Kelly v. Microsoft Corp., 2008 WL 5000278, at *1. Moreover, these alleged conversations are completely irrelevant. The only license at issue in the Cases is between Apple and IV. Microsoft is not a party to the Cases and its license is completely irrelevant. Conversations between two nonparties about a license not at issue are parole evidence and should be excluded from evidence by this Court. See Reif v. CNA, 248 F.R.D. at 454 (preventing an “apex” deposition when there was no nexus between the deponent’s knowledge and the issues in the case).
Finally, Lodsys claims that the deposition of Dr. Myhrvold is necessary because Dr. Myhrvold’s approval would have been required for the purchase of the Patents. The purchase of the Patents by IV is not in dispute in this case, and even if it was it does not justify a deposition of IV’s CEO. Dr. Myhrvold is not the only IV employee with information about the acquisition of the Patents. In fact, Mr. Detkin has already testified extensively about the acquisition and sale of the patents. (Ward Decl., Ex. 11 (Detkin Depo.) at 122:10-124:5 (due diligence), 157:21-159:18 (acquisition of the Patents), 160:19-163:6 (sale of the Patents to Webvention)) Mr. Detkin has also testified that he played a significant role in relevant decision-making, and such decisions were not made by Dr. Myhrvold alone. Id. at 15:13-20. Lodsys has not met its burden in demonstrating Dr. Myhrvold is likely to have “unique personal knowledge of relevant facts” relating to the acquisition of the Patents. See Kelly v. Microsoft Corp., 2008 WL 5000278, at *1. Once again, the fact that Lodsys failed to exhaust its questions on this topic cannot be the basis for a deposition of IV’s CEO.
A deposition of IV’s CEO, Dr. Myhrvold, is not justified in these Cases. Lodsys has failed to demonstrate the Dr. Myhrvold has relevant knowledge that would justify his deposition. Lodsys has also failed to exhaust other available and less-burdensome means of discovery. It should not now be allowed to depose IV’s CEO on issues that are irrelevant to the Cases. Any legitimate questions either were or should have been directed to the deposition of IV’s Rule 30(b)(6) deponent Mr. Detkin. For the foregoing reasons, Dr. Myhrvold respectfully requests that the Court issue a Protective Order precluding Dr. Myhrvold’s deposition.
RESPECTFULLY SUBMITTED this 14th day of June, 2013.
Counsel for the movant certifies the movant has in good faith conferred with other affected parties in an effort to resolve the dispute without court action in accordance with the attached declaration.
2 Electronic Arts’ counsel has represented that it has no interest in taking Dr. Myhrvold’s deposition if Lodsys does not do so. Electronic Arts believe such a deposition is meritless and irrelevant. Ward Decl. at ¶ 14.
1. I am an attorney at the law firm of IRELL & MANELLALLP, counsel for Dr. Nathan Myhrvold (“Dr. Myhrvold”). I am a member in good standing of the State Bar of California. My application to appear pro hac vice on behalf of Dr. Myhrvold in the United States District Court for the Western District of Washington is currently pending. I have personal knowledge of the facts set forth in this Declaration and, if called as a witness, could and would testify competently to such facts under oath. I make this declaration in support of Nathan Myhrvold’s motion for protective order.
2. Attached hereto as Exhibit 1 is a true and correct copy of the Protective Order in Lodsys LLC, et al. v. Brother Int’l Corp., et al., Case No. 2:11-cv-90 (E.D. Tex.) and Lodsys Group, LLC v. Combay, Inc., et al., Case No. 2:11-cv-272 (E.D. Tex.) (together, the “Cases”).
3. Attached hereto as Exhibit 2 is a true and correct copy of Lodsys Group LLC’s (“Lodsys”) document subpoena to Intellectual Ventures (“IV”) dated October 25, 2012.
4. Attached hereto as Exhibit 3 is a true and correct copy of Lodsys’ deposition subpoena to IV dated October 25, 2012.
5. Attached hereto as Exhibit 4 is a true and correct copy of Lodsys’ deposition subpoena to Nathan Myhrvold dated October 25, 2012.
6. On November 5, 2012, Chris Huck, counsel for Lodsys agreed to take Dr. Myhrvold’s deposition off calendar and work with me to reschedule on a mutually agreeable date. Attached hereto as Exhibit 5 is a true and correct copy of Mr. Huck’s email. On many occasions, I spoke with Mr. Huck about Dr. Myhrvold’s intention to file a petition for protective order if Lodsys insisted on taking his deposition.
7. Attached hereto as Exhibit 6 is a true and correct copy of Electronic Arts Inc. and Rovio Entertainment, Ltd.’s (Collectively “Electronic Arts”) deposition subpoena to Nathan Myhrvold dated March 21, 2013.
8. On April 18, 2013, Lodsys and Electronic Arts agreed to reschedule Dr. Myhrvold’s deposition for June 18, 2013. Attached hereto as Exhibit 7 is a true and correct copy of an email chain confirming this date change.
Microsoft’s license with IV; and (3) acquisition of the Patents by IV would have required Dr. Myhrvold’s approval and Lodsys should be allowed to question him about this.
10. On June 5, 2013, after my earlier call, I spoke with Mr. Huck and Shawn Liu, counsel for Electronic Arts, separately about rescheduling Dr. Myhrvold’s deposition from June 18, 2013 to July 26, 2013. Mr. Huck agreed to such an extension. Mr. Liu tentatively agreed to the extension, but later withdrew this agreement. Attached hereto as Exhibit 8 is a true and correct copy of Mr. Huck’s email to all parties in the Cases about rescheduling Dr. Myhrvold’s deposition.
11. From June 5 to June 11, 2013, I spoke with Mr. Liu and Jonathan Sanders, counsel for Apple, on a regular basis about rescheduling Dr. Myhrvold’s deposition for July 26, 2013. At the close of business on June 11, 2013, Mr. Sanders informed me that Apple would oppose any motion to reschedule Dr. Myhrvold’s deposition. Mr. Liu informed me that Electronic Arts would also oppose such a motion.
12. On June 6, 2013, I spoke with Mr. Liu and Mr. Huck about Dr. Myhrvold’s anticipated Motion for Protective Order in light of the parties’ then-ongoing good faith negotiations to reschedule the deposition date, and both Lodsys and Electronic Arts agreed not to oppose the timing of such a motion.
13. On June 11, 2013, I met and conferred with Mr. Huck about Dr. Myhrvold’s motion for protective order. Mr. Huck informed me that Lodsys would oppose such a motion.
14. On June 11, 2013, I met and conferred with Mr. Liu about Dr. Myhrvold’s Motion for Protective Order. Mr. Liu informed me that Electronic Arts do not oppose such motion. Mr. Liu told me that Electronic Arts have no interest in taking Dr. Myhrvold’s deposition if Lodsys does not do so. Electronic Arts noticed their deposition of Dr. Myhrvold to ensure that they would have equal time to ask questions if such a deposition were to occur.
15. On June 12, 2013, Mr. Liu agreed not to pursue Dr. Myhrvold’s deposition pending the resolution of Dr. Myhrvold’s Motion for Protective Order. On June 13, 2013, Mr. Huck agreed to the same. Attached hereto as Exhibit 9 is a true and correct copy of an email I received from Mr. Huck on June 13, 2013, which also contains Mr. Liu’s June 12, 2013 email referenced above.
16. On June 13, 2013, Dr. Myhrvold attempted in good faith to enter a stipulation with Lodsys and Electronic Arts allowing Dr. Myhrvold’s motion for protective order to be filed under seal because it contained various excerpts of Peter Detkin’s deposition, which was designated Highly Confidential Attorney’s Eyes Only subject to the parties’ Protective Order in the Cases, and other confidential business information. Electronic Arts stipulated that IV could file under seal. Lodsys did not stipulate to such a filing. Attached hereto as Exhibit 10 is a true and correct copy of an email from Mr. Huck dated June 13, 2013, which also contains Mr. Liu’s response stipulating to IV’s request.
17. On June 14, 2013, I spoke with Mr. Huck about Dr. Myhrvold’s motion to seal. I informed Mr. Huck that we would only be sealing one exhibit to the motion, which contained various excerpts from Peter Detkin’s deposition. I explained that these excerpts reveal confidential business information about IV’s business transactions and methodologies, and that forcing a nonparty to publicly reveal this information, which it only produced subject to a protective order, would be harmful to the business and personal interests of Dr. Myhrvold and his company IV. Mr. Huck and I were unable to reach an agreement on the need to file the document under seal, or any other alternatives to filing under seal. Mr. Huck informed me that he would reassess whether Lodsys opposes the Motion to Seal after Dr. Myhrvold's motion is filed.
18. Attached hereto as Exhibit 11 are true and correct copies of excerpts of the Rule 30(b)(6) deposition of Peter Detkin taken on April 4, 2013.
EXECUTED on June 14, 2013, at Los Angeles, California.

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