THE UNITED STATES DISTRICT COURT MIDDLE … · MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION...

THE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION

PARKERVISION, INC.,

Plaintiff,

v. Case No. 3:11-cv-719-J-37-TEM QUALCOMM INCORPORATED,

Defendant.

QUALCOMM INCORPORATED,

Counterclaim Plaintiff,

v.

PARKERVISION, INC., and STERNE, KESSLER, GOLDSTEIN & FOX PLLC

Counterclaim Defendants.

QUALCOMM’S MEMORANDUM OF LAW IN OPPOSITION TO PARKERVISION’S MOTION TO COMPEL QUALCOMM’S RESPONSES TO INTERROGATORY NOS. 4 AND 9, AND FOR QUALCOMM TO PRODUCE

CORRESPONDENCE WITH SUBPOENAED THIRD PARTIES

Case 3:11-cv-00719-RBD-TEM Document 172 Filed 09/24/12 of 25 PageID 7060

TABLE OF CONTENTS

Page (s) Preliminary Statement ............................................................................................................................... 1

Argument .................................................................................................................................................... 2

I. Qualcomm’s Production of Schematic Documents Pursuant to Rule 33(d) Properly Responds to Interrogatory No. 4. ............................................................................... 2

A. “All Differences” Between the Relevant Products “With Respect to the Receiver/Receiver Function that Performs Direct Conversion” May be Readily and Completely Identified Through Review of their Respective Schematics. .................................................................................................... 3

B. The Burden Associated With Review of Schematics to Identify Differences Between Products Is Equivalent for Each Party. .................................... 4

C. Interrogatory No. 4 Does Not Seek Qualcomm’s Legal Contentions. ...................... 6

D. Qualcomm Has Complied with the Identification Requirement of 33(d). .................................................................................................................................. 7

II. Qualcomm Has Agreed to Provide ParkerVision with all Reasonably Relevant Information in Response to Interrogatory No. 9. ..................................................................... 7

A. Factual Background ......................................................................................................... 8

1. Qualcomm’s Objections to the Scope of Interrogatory No. 9 ....................... 8

2. The Exhibit B Products and Their Relation to the “Chipset Solutions” ........................................................................................................... 10

B. Qualcomm Has Agreed to Provide Financial Information For the Products that Contain the Accused Instrumentality. ............................................... 12

1. The three product categories discussed during the 1999 negotiations track the categories of Exhibit B Products and do not include entire chipsets containing multiple, independently sold products in the proposed royalty base. ................................................. 13

2. ParkerVision’s unfounded assertion that sales of the Exhibit B Products generate “convoyed sales” of other products does not justify its broad requests for discovery. ......................................................... 14

3. Chipset revenues are not likely to lead to the discovery of evidence relevant to any cited Georgia-Pacific factor. ................................... 16


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C. ParkerVision’s Demand for “Pre-Infringement” Revenue for Accused Products is a Contradiction in Terms, and Its Failure To Plead Properly Indirect Infringement Defeats ParkerVision’s Demand for Worldwide Sales Data. ....................................................................................................................... 17

III. Third Party Correspondence ..................................................................................................... 18

A. Factual Background. ...................................................................................................... 18

B. This Request is Not Reasonably Calculated to Lead to Admissible Evidence, Nor is it Reasonably Related to Any Claim or Defense in this Action............................................................................................................................... 19

Conclusion ................................................................................................................................................ 20


Preliminary Statement

Patting itself on the back for its “patience” in “allowing Qualcomm more than

seven months to remedy its deficient Interrogatory responses” (Dkt. 171 at 1), ParkerVision has

moved to compel Qualcomm to further supplement interrogatories it has already answered

fully (Interrogatory No. 4), or as fully as the scope of authorized discovery in this case would

allow (Interrogatory No. 9). Interrogatory No. 4 seeks prose descriptions of “differences”

between circuitry that are already completely captured in engineering schematic diagrams

Qualcomm has produced to ParkerVision in full compliance with Fed. R. Civ. P. 33(d).

Interrogatory No. 9 seeks financial data that is not relevant to any viable and/or adequately

pleaded claim in this case, even going so far as to request data on sales of products before those

products went on sale. And the request for correspondence with recipients of subpoenas

Qualcomm served is nothing but “discovery of discovery,” a kind of discovery the “reasonably

calculated to lead to the discovery of admissible evidence” standard is intended to police.

Notably, and obscured by its profession of “patience,” is that ParkerVision did not take issue

with Qualcomm’s responses to Interrogatories No. 9 until six months after Qualcomm objected

to them, and did not formally request Qualcomm’s lawyer-to-lawyer correspondence with third

parties Qualcomm had subpoenaed until months after those subpoenas had been served.

If this motion is to be decided based on which Party has been more “patient” in

awaiting discovery, that consideration favors Qualcomm. Qualcomm served the first document

requests in this case in January, six weeks before ParkerVision served its requests. And when

ParkerVision produced some documents, thousands were in unreadable and corrupted files,

which ParkerVision has not fixed. Qualcomm has yet to receive documents responsive to many

of its document requests, despite ParkerVision’s repeated promises to produce them. By

contrast, Qualcomm has produced over 1.5 million pages of documents and has properly


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responded to ParkerVision’s overbroad, irrelevant and burdensome discovery requests.

ParkerVision’s motion does not seek legitimate discovery, but is instead an overreaching

attempt either to saddle Qualcomm with burdensome “busy work” that ParkerVision should do

itself or to obtain information to which it is not entitled. ParkerVision’s motion should be

denied.

Argument

I. Qualcomm’s Production of Schematic Documents Pursuant to Rule 33(d) Properly Responds to Interrogatory No. 4.

Interrogatory No. 4 is ParkerVision’s effort to make Qualcomm do the work that

ParkerVision itself should have done before serving its infringement contentions. At the outset

of this case, ParkerVision itself urged this Court to adopt procedures that would require it – not

Qualcomm – to provide detailed infringement contentions, setting forth “[s]eparately, for each

asserted claim, and for each accused apparatus, product, . . . [a] chart identifying specifically

where each element of each asserted claim is found within each Accused Instrumentality.” (Dkt.

69 at 15.) ParkerVision instead produced a cursory infringement claim chart for one Qualcomm

product and contended, without basis for doing so, that all of the other accused products were

the same for purposes of the infringement analysis. In that context, it is apparent that through

this motion, as it relates to Interrogatory No. 4, ParkerVision is simply outsourcing to

Qualcomm the job of drafting infringement contentions that it does not want to do by itself.

But even if the Interrogatory were not an improper circumvention of the Case

Management Order’s requirements relating to infringement contentions, Qualcomm has

already responded to that interrogatory fully in compliance with Federal Rule of Civil

Procedure 33. In its Second Supplemental Response to Interrogatory No. 4 (served September

14), Qualcomm responded that, pursuant to Rule 33(d), it will answer this interrogatory by


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directing ParkerVision to the “schematics” for the products. (See Declaration of Joseph E.

Lasher, dated September 24, 2012 (“Lasher Decl.”), Ex. 1.) “Schematics,” as used in the field of

circuit design, refers to the two-dimensional pictorial representation of the circuit components,

their relationship to each other, and their arrangement within the complete circuit. They are to

a circuit what architectural blueprints are to a building. An example of a schematic for a

moderately complex electronic circuit is attached as Exhibit 2 to the Lasher Declaration.

Rule 33(d) expressly permits a party to substitute its own business records for a

narrative answer to an interrogatory when (i) the answer “may be determined by examining”

those records, and (ii) “if the burden of deriving or ascertaining the answer will be substantially

the same for either party.” Fed. R. Civ. P. 33(d); Unlimited Res. Inc. v. Deployed Res., LLC, No.

3:07-cv-961, 2009 WL 1370778, at *3 (M.D. Fla. May 13, 2009). In this case both conditions for

electing the option Rule 33(d) affords are readily satisfied.

A. “All Differences” Between the Relevant Products “With Respect to the Receiver/Receiver Function that Performs Direct Conversion” May be Readily and Completely Identified Through Review of their Respective Schematics.

For each of its hardware semiconductor products, including each of the 75

products identified in its Second Supplemental Exhibit B to its Supplemental Response to

Interrogatory No. 2, (the “Exhibit B Products”), Qualcomm maintains engineering schematics

describing in complete detail and in a standard format familiar to all electrical engineers the

details of each product’s circuit architecture. Qualcomm has made available to ParkerVision

engineering schematics for all – not just “a subset” (Dkt. 171 at 18) – of the Exhibit B Products.

ParkerVision’s technical expert began reviewing these schematics on September 9, 2012 (three

days after ParkerVision filed its motion). There is no better source than the schematic diagrams

for description and comparison of the design of the Exhibit B Products, because it is those

schematics alone that set forth their architecture.


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Review of the schematics by an electrical engineer (which ParkerVision has

commissioned) is a far more effective way to discern differences between semiconductor chips

than review of a lawyer-mediated prose description of those differences. In electrical

engineering, as in many other contexts, a “picture is worth a thousand words,” and the

relevance of that truism to infringement disputes has not been lost on courts overseeing such

disputes.1 For ParkerVision to suggest that it and its experts can learn more about the structure

of the chips depicted in those schematics from reading prose descriptions of them, than from its

own expert’s first-hand comparison of the schematics themselves, is akin to an argument that a

person can learn more about the differences between the geography of Chicago and

Philadelphia, by reading a prose narrative description of the grids of those two cities, than by

just looking at those cities’ maps.

B. The Burden Associated With Review of Schematics to Identify Differences Between Products Is Equivalent for Each Party.

The second requirement of Rule 33(d) is that the burden of compiling the

requested information be substantially the same as between the parties. Here, according to the

language of Interrogatory 4, the task is to compare the engineering schematics for each of the

Exhibit B Products. These engineering schematics—which Qualcomm has already made

available to ParkerVision—are simply large pictures with standardized engineering

annotations. In effect, ParkerVision has asked Qualcomm to lay a large number of pictures side

by side and to compose paragraphs about all the respects in which those pictures differ, in an

1 See, e.g., Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1565 (Fed. Cir. 1991) (holding that “drawings

alone may provide a ‘written description’ of an invention as required by [35 U.S.C. § 112]”); In re Wolfensperger, 302 F.2d 950, 955 (C.C.P.A. 1962) (“the only informative and significant disclosure in many electrical and chemical [patents] is by means of circuit diagram or graphic formulae”); Flakice Corp. v. Liquid Freeze Corp., 130 F. Supp. 471, 475 (N.D. Cal. 1955) (relying on pictures to compare products in patent infringement suit, and noting that “[a] picture is worth a thousand words.”).


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effort to spare ParkerVision and its experts the burden of doing their own infringement

analyses.

ParkerVision asserts that this is a less onerous task for Qualcomm because

Interrogatory No. 4 “is directed to the functionality of Qualcomm’s own products, and is within

the knowledge of Qualcomm’s own engineers.” (Dkt. 171 at 14.) However, simply because

these diagrams are in the custody of Qualcomm and concern Qualcomm’s own products does

not mean that Qualcomm would have an advantage in drafting prose identifying and

describing the numerous differences among them.2 Qualcomm does not prepare records of the

technical differences among its various products, primarily because when a Qualcomm

engineer wishes to understand how one Qualcomm product differs from another, he does

precisely what Qualcomm has suggested ParkerVision do here: he compares the engineering

schematics for the two products. The burden of drafting prose descriptions of “all differences

between the products disclosed in response to Interrogatory 2 with respect to the receiver (or

receiver function) that performs direct conversion” (Dkt. 171 at 1 (emphasis added)), is also

fairly described as herculean. There are 75 Qualcomm products currently identified in response

to Interrogatory No. 2, and the identification and description of all the “differences” between

these products’ receivers or receiver functions would be voluminous, to say the least, in light of

their inherent complexity. The requirement of the interrogatory that “all differences” be

identified and described, distinguishes this case from the interrogatory propounded in

LaserDynamics, Inc. v. Asus Computer International, No. 2:06-CV-348, 2009 U.S. Dist. LEXIS 3878,

2 See, e.g., Compagnie Francaise d'Assurance Pour le Commerce Exterieur v. Phillips Petroleum Co., 105

F.R.D. 16, 44 (S.D.N.Y. 1984) (“One party’s familiarity with the documents does not necessarily create a disparity in the ease of discovery.”); Petroleum Ins. Agency, Inc. v. Hartford Acc. and Indem. Co., 111 F.R.D. 318, 320 (D. Mass. 1983) (the requesting party “ha[s] the burden to show that the burden of deriving or ascertaining the answer is not substantially the same for both parties”); Sadofsky v. Fiesta Prods., LLC, 252 F.R.D. 143, 147-49 (E.D.N.Y. 2008) (process of compiling information from business records was no more burdensome to one party than the other where the records were not difficult to decipher).


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at *7-8 (E.D. Tex. Jan. 21, 2009). There, the interrogatory merely called for a description of the

functionality of the accused disc drive. Id. It did not call for exhaustive comparisons among 75

different products.

ParkerVision’s argument also proves too much. Rule 33(d) cannot be satisfied

except through the production of business records of the responding party. Under

ParkerVision’s theory, Rule 33(d) could never be invoked, because a responding party will

always be more familiar with its own business records than a requesting party. The key

question is not whether Qualcomm is more familiar with these records than ParkerVision, but

whether such familiarity would cause Qualcomm’s burden in compiling information about the

records to be substantially lower than that of ParkerVision. It does not.

ParkerVision’s assertion that the burden to Qualcomm would be “negligible” in

light of the effort Qualcomm undertook in connection with its Motion to Strike (Dkt. 154) is

misguided. As ParkerVision acknowledges, the Dunworth Declaration (Dkt. 155) “addresses

only a subset of [the] information requested by ParkerVision in Interrogatory No. 4.” (Dkt. 171

at 13.) The Dunworth Declaration itself is also clear on this point, noting that “the Accused

Products contain RF circuitry . . . that differs from the circuitry found in the QSC6270 in a

variety of ways, several of which I have identified in the subsequent sections of this declaration.”

(Dkt. 155 ¶ 11 (emphasis added).) Because the Dunworth Declaration concerns a small number

of the differences among the receiver functions of the Exhibit B Products, ParkerVision’s

assertion that the existence of the Dunworth Declaration means that Interrogatory No. 4

“imposes no legitimate burden whatsoever” does not withstand scrutiny. (Dkt. 171 at 12.)

C. Interrogatory No. 4 Does Not Seek Qualcomm’s Legal Contentions.

ParkerVision’s characterization of Interrogatory No. 4 as seeking Qualcomm’s

legal contentions regarding the differences among the Exhibit B Products is meritless. On its


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face, Interrogatory No. 4 requests that Qualcomm “[i]dentify and describe all differences

between the products disclosed [in Exhibit B].” (Dkt. 171 at 1.) Interrogatory No. 4 does not

require Qualcomm to link its description to any of the legal issues in this case. See, e.g., Myers v.

GoldCo. Inc., No. 4:08CV8, 2008 WL 1995131, at *2 (N.D. Fla. May 6, 2008) (an interrogatory is

not a contention interrogatory unless it “set[s] forth the particular facts and law as to which the

contention of the opposing party is sought.”); Sheehy v. Ridge Tool Co., No. 3:05-CV-01614, 2007

WL 1020742, at *1 (D. Conn. Apr. 2, 2007) (contention interrogatories “seek to elicit the

responding party's contentions by asking it to state the factual basis underlying its substantive

legal claims”). Interrogatory No. 4 does not similarly seek responses to legal contention

interrogatories; it is an interrogatory seeking facts, to which Rule 33(d) applies.

D. Qualcomm Has Complied with the Identification Requirement of 33(d).

Finally, ParkerVision asserts that Qualcomm has failed to “specif[y or] produce[]

the records” to which it has referred ParkerVision. (Dkt. 171 at 17.) That is not so. Qualcomm

has made the schematics for all of the Exhibit B Products available to ParkerVision’s expert for

his review. (See Dkt. 171 at 18.) To enable his review, Qualcomm segregated them from the

other documents within Qualcomm’s production, thereby satisfying the identification

requirement of Rule 33(d)(1). McKie v. Sears Prot. Co., No. CV 10-1531, 2011 U.S. Dist. LEXIS

45306, at *2, *4 (D. Or. Apr. 27, 2011) (identification of documents pursuant to Rule 33(d)

unnecessary when it is “self-evident” which documents are responsive).

II. Qualcomm Has Agreed to Provide ParkerVision with all Reasonably Relevant Information in Response to Interrogatory No. 9.

ParkerVision complains in its Motion to Compel that Qualcomm’s response to

Interrogatory No. 9 “fail[ed] to provide the information that the Interrogatory explicitly requests,”

(Dkt. 171 at 7 (emphasis in original)) and that “Qualcomm may not unilaterally redefine the


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scope of Interrogatory No. 9.” (Dkt. 171 at 19.) What ParkerVision calls “unilateral

redefinition” is what the Federal Rules call “objections,” Fed. R. Civ. P. 33(b), which are

authorized when a discovery request seeks, among other things, information not “reasonably

calculated to lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1). Qualcomm

acted reasonably and appropriately in objecting to ParkerVision’s overreach. And rather than

force ParkerVision to re-serve a proper interrogatory, Qualcomm committed on its own

initiative to produce the subset of information called for by the Interrogatory that was a proper

subject for discovery: revenue and cost data for the Exhibit B Products relevant to

ParkerVision’s claims of direct infringement under 35 U.S.C. § 271(a).

A. Factual Background

ParkerVision served Qualcomm with its First Set of Interrogatories (Nos. 1-9) on

January 18, 2012. Interrogatory No. 9 requested Qualcomm to: “[s]eparately for each product

identified in response to Interrogatory 1, disclose on a quarter-by-quarter basis to the present

[various requested] financial data.” The referenced first Interrogatory asked Qualcomm to

“[i]dentify all Qualcomm products sold within the United States or imported (regardless of

whether by Qualcomm or by others) into the United States since 1997.” (Emphasis added.)

1. Qualcomm’s Objections to the Scope of Interrogatory No. 9

Qualcomm objected to Interrogatory No. 9 on February 21 “because it seeks

information about Qualcomm products that could not infringe the patents-in-suit under any

reasonable interpretation because the products are not related to the field of RF technology,

and/or products that were not sold within the United States or imported into the United States

by Qualcomm within the permissible period for which ParkerVision may seek relief.” In

particular, by linking Interrogatory No. 9 to Interrogatory No. 1, requesting identification of all

Qualcomm products sold within or imported to the United States, Interrogatory No. 9 sought


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financial information on thousands of Qualcomm products having no relation to the technology

at issue in this case. Qualcomm therefore committed in its response to provide data, not for all

Qualcomm products, but only for the Qualcomm chips that were actually accused in

ParkerVision’s infringement contentions.

In a February 22 letter, ParkerVision objected to Qualcomm’s proposed

narrowing of the scope of its responses to Interrogatories Nos. 1-4 to the accused products

identified in its infringement contentions, and proposed, as a compromise, that Qualcomm

supplement these Interrogatory responses “by providing the information given in Exhibits A

and B for Qualcomm’s products that contain a receiver (or a receiver function) that performs

direct conversion via passive mixers” (the “Accused Instrumentality”). (Lasher Decl. Ex. 3.)

Qualcomm agreed, in light of a representation by ParkerVision in a February 24 email that it

would limit its infringement contentions accordingly. (See Lasher Decl. Ex. 4.) On March 2,

2012, Qualcomm served a Supplemental Exhibit B identifying the preliminary results of

Qualcomm’s ongoing efforts to identify its chips that directly downconvert via passive mixers,

and ParkerVision accused these same 61 products in its final infringement contentions dated the

same day.

Qualcomm served ParkerVision with its First Supplemental Objections and

Responses to ParkerVision’s First Set of Interrogatories (Nos. 1-9) on June 21, 2012. As part of

its Supplemental Response to Interrogatory No. 2, Qualcomm provided a complete list of all 75

of Qualcomm’s chips “ever sold or offered for sale as of January 1, 2012 that contain a receiver

(or receiver function) that performs direct conversion via passive mixers.” (Dkt. 171, Ex. J at 6.)

In Exhibit C to its Supplemental Response to Interrogatory No. 9, Qualcomm provided

estimated U.S. sales revenues on a quarterly basis since July 2005, as well as estimated costs and

profits associated with those U.S. sales, for these same 75 products, i.e., the 75 Products


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containing the Accused Instrumentality. Qualcomm did not commit to provide revenues

derived from its foreign sales of the Exhibit B Products, because such sales fell outside the limits

of the U.S. patents ParkerVision had asserted Qualcomm directly infringed.

2. The Exhibit B Products and Their Relation to the “Chipset Solutions”

The 75 Exhibit B Products are single Qualcomm chips that may be grouped into

three categories: (1) standalone receivers; (2) transceivers, i.e., receivers plus transmitters; and

(3) chips with transceivers and baseband circuitry. (See Declaration of Jim Tran, dated

September 24, 2012 (“Tran Decl.”) ¶ 5.) Attached as Exhibit B to the Tran Declaration is a table

classifying each of the 75 Exhibit B Products. The RGR6240 is the only Exhibit B Product that is

a standalone receiver. (Id. ¶ 6.) Sixteen of the Exhibit B Products are transceivers, while the

remaining 58 chips include transceivers plus baseband integrated on a single chip. (Id.) The

third category (integrated transceiver/baseband) consists of products that include both the

baseband circuitry that processes and transforms data prior to its transmission or after its

reception by the transceiver, and the transceiver circuitry itself. (Id. ¶¶ 4-5.) Like receivers and

transceivers, integrated transceiver/baseband chips are sold as indivisible units. (Id. ¶ 7.)

Because each of the 75 Exhibit B Products contains a receiver or a receiver function that directly

downconverts via passive mixers, each of the Exhibit B Products represents a saleable unit

containing the Accused Instrumentality.

What ParkerVision appears to be seeking through its motion are not revenues

from standalone, individually saleable products. Rather, ParkerVision claims to be seeking

revenues from Qualcomm “chipsets,” which are collections of individually sold chips that

provide complementary functionality. (Id. ¶ 8.) For example, the RTR6285 transceiver, one of

the Exhibit B Products, is compatible with Qualcomm’s MSM6260/MSM6255A/MSM6245,

MSM6280/MSM6290, MSM6246, MSM7225, QSD8250 and MSM7200A baseband chips (none of


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which contain any receiver functionality and none of which is an Exhibit B Product). When the

RTR6285 is incorporated into a device along with the MSM7200A, it is referred to as being part

of the “MSM7200A Chipset Solution.” (Id. ¶ 9.) The RTR6285 does not need to be paired with

the MSM7200A, though; customers may choose to purchase the RTR6285 along with or without

any other compatible chip provided by Qualcomm. (Id. ¶ 10.) Depending on the needs of the

customer, all of the chips in a “chipset” that includes the RTR6285 plus one or more other chips

– such as a baseband chip and chips with Bluetooth or Wi-Fi functionality – may be purchased

at the same time or each particular chip in the “chipset” may be purchased in different

quantities at different times. (Id.) Thus, although the RTR6285 may be said to be part of the

MSM7200A Chipset when used in a device along with the MSM7200A, it is a separate, distinct

product.

Several months ago, Qualcomm responded to Interrogatory No. 9 by serving

estimates of U.S. revenues, costs and profits for each of the Exhibit B Products—in other words,

the products that ParkerVision has accused or is seeking to accuse of infringement—on a

quarterly basis since July 2005.3 Contrary to ParkerVision’s Motion to Compel, Qualcomm did

not tell ParkerVision that it had provided financial data for only the receiver portion of the

Exhibit B Products. (See Dkt. 171 at 7, 8, 19.) Quite the opposite. Qualcomm provided, and

informed ParkerVision that it had provided, revenue data for each of the Exhibit B Products in

their entirety. Qualcomm explained to ParkerVision that its objection was directed to any

suggestion that it should also provide revenue data for other chips that are compatible with the

Exhibit B Products to the extent such chips may be said to form part of the “chipsets” including

3 Qualcomm also informed ParkerVision at the meet-and-confer that due to a database error, the

revenue data provided in Exhibit C were inaccurate. Qualcomm is working diligently to address this issue and has committed to provide ParkerVision with corrected estimates of U.S. revenues, costs and profits for the Exhibit B Products by October 3.


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the Exhibit B Products. These additional chips are products that are sold separately and that do

not, unlike the accused integrated baseband/transceiver and other accused products, contain

the Accused Instrumentality. As such, under clear, recent Federal Circuit authority,

LaserDynamics, Inc. v. Quanta Computer, Inc., Nos. 2011-1440, 2011-1470, 2012 WL 3758093, at *11

(Fed. Cir. Aug. 20, 2012) (“[I]t is generally required that royalties be based not on the entire

product, but instead on the smallest saleable patent-practicing unit.”), they are not

appropriately included in any royalty base, and they are not relevant to any reasonable

damages analysis.

B. Qualcomm Has Agreed to Provide Financial Information For the Products that Contain the Accused Instrumentality.

Qualcomm has agreed to provide U.S. sales revenue for each of the Exhibit B

Products: the products containing receivers with passive mixers for downconversion. But, by

its motion, ParkerVision also demands detailed financial information for any other product that

may be identified as part of a “chipset” with one of the accused products. ParkerVision bases

this demand on a scattershot of theories, contending alternatively that (i) in their aborted 1999

negotiations, the parties at one time contemplated structuring the licensing rates based on the

value of the whole of Qualcomm’s chipsets that would incorporate ParkerVision’s technology;

(ii) chipset revenues may be relevant to a convoyed sales damages analysis; and (iii) chipset

revenues may be relevant to a Georgia-Pacific analysis. As set forth below, all of these

arguments are based on serious misapprehensions about the nature of the products Qualcomm

sells. Once the correct facts are understood, the over breadth of ParkerVision’s interrogatory

becomes apparent.


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1. The three product categories discussed during the 1999 negotiations track the categories of Exhibit B Products and do not include entire chipsets containing multiple, independently sold products in the proposed royalty base.

ParkerVision appears to have misunderstood the three categories of products the

parties discussed as potential royalty bases during their 1999 negotiations. As is apparent from

the excerpt of the June 10, 1999 proposed term sheet cited and submitted as an exhibit by

ParkerVision, the parties proposed different royalty rates for three categories of products:

“Receivers,” “Transceivers” and “Integrated Baseband/RF.” (See Dkt. 171 Ex. O.) These three

categories of products correspond to the three categories of Exhibit B Products for which

Qualcomm has already agreed to provide revenue data. Contrary to ParkerVision’s assertion,

the third category, “Baseband/RF,” does not refer to chipsets, i.e., collections of separate but

compatible chips, including chips, such as baseband chips, which could not include

ParkerVision’s D2D technology; rather, this category refers to “Integrated Baseband/RF” chips,

i.e., single chips with a transceiver and a baseband integrated within the same chip as a singly

sold product. (See id.) Therefore, the parties “actual negotiation” does not support a damages

theory under which any base would include revenues derived from sales of Qualcomm’s entire

chipsets; if anything, it confirms that the three categories of standalone, Exhibit B Products

accurately reflect the relevant products for a damages model.

ParkerVision also asserts that it requires chipset revenues because “the chipsets

are likely to be Qualcomm’s smallest saleable unit.” (Dkt. 171 at 21.)4 The Federal Circuit has,

indeed, recently affirmed that, as a general rule, revenues for the smallest saleable patent-

practicing unit form the appropriate royalty base for any reasonable royalty analysis.

LaserDynamics, 2012 WL 3758093, at *11. ParkerVision is wrong, however, to suggest that

4 It is odd to hear ParkerVision suggest this in its brief; during the meet-and-confer, ParkerVision’s

counsel frankly acknowledged it was seeking financial data for “the largest [sic] saleable products.”


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Qualcomm’s chipsets could ever comprise such a unit. As outlined in Section II.A.2., supra, and

as set forth in the accompanying declaration of Jim Tran, chipsets are not single products, but

collections of individually sold but compatible chips. These chipsets may include one of the

Exhibit B Products that incorporates the Accused Instrumentality (for which Qualcomm has

already committed to supply revenue data), as well as one or more separate chips that do not

contain the Accused Instrumentality. The very fact that the chipsets whose revenues

ParkerVision is seeking are collections of individually sold chips, some of which include and

some of which do not include the Accused Instrumentality, confirms that such chipsets are not

the “smallest saleable patent-practicing units.”5

2. ParkerVision’s unfounded assertion that sales of the Exhibit B Products generate “convoyed sales” of other products does not justify its broad requests for discovery.

ParkerVision asserts that it is entitled to discovery of financial information on all

Qualcomm chips that are compatible with those containing the Accused Instrumentality,

because it believes it may have a viable “potential convoyed sales theory.” (Dkt. 171 at 22.)

Notably, ParkerVision does not describe what that theory is, or how it might be supported. To

assert that sales of patented products “convoy” sales of unpatented products, such that the

royalty rate on the patented should be higher, depends upon a showing that demand for the

first is the basis for demand for the second. See T.J. Smith & Nephew Ltd. v. Parke, Davis & Co.,

Nos. 92-1240, 92-1241, 1993 WL 378649, at *1 (Fed. Cir. Sept. 28, 1993) (upholding district court’s

determination that defendant’s sales of a non-infringing catheter did not depend on sales of the

infringing product and were therefore not convoyed sales).

5 Although not relevant to this motion, Qualcomm may contend that some of the Exhibit B Products,

for which Qualcomm will supply full U.S. revenue data in response to Interrogatory No. 9, are not in fact the “smallest saleable patent-practicing units.”


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Even less facially plausible is a theory that ParkerVision may recover “lost

profits” on sales of purportedly “convoyed” products. (See Dkt. 171 at 22.) ParkerVision has

not reported the sale of a single product for the last 7 years, making it a most implausible

proponent of a lost profits theory of damages.6 Only since filing this lawsuit, has it claimed to

offer any cellular RF chip for sale, and none of its recent SEC filings offers any indication that

any such chip has actually been sold. And even if ParkerVision wishes to assert a theory of lost

sales of “RF chips” – i.e., chips containing a receiver embodying its claimed downconversion

technology – that would not support a request for information on Qualcomm’s sales of products

that do not contain any receiver functionality whatsoever, such as the standalone baseband

chips whose revenues ParkerVision is seeking through this motion to obtain.

The Federal Circuit has expressed frustration with the common attempt of

patentees to “artificially inflate the jury’s damages calculation” by including in the royalty base

revenues on non-patented components, and has cautioned against the dangers of permitting

unwarranted admission into evidence of revenues earned by the accused infringer associated

with non-patented products or components. See LaserDynamics, 2012 WL 3758093, at *12 (“Such

disclosure to the jury of the overall product revenues cannot help but skew the damages

horizon for the jury, regardless of the contribution of the patented component to this revenue.”).

In light of this guidance regarding the stringent standards for admissibility of revenues on non-

patented products, and the speculative nature of ParkerVision’s convoyed sales suggestion, the

discovery ParkerVision seeks regarding financial information for Qualcomm’s other chips, in

addition to the Exhibit B Products, is not “reasonably calculated to lead to the discovery of

admissible evidence” and should be rejected. Fed. R. Civ. P. 26(b)(1); see also Great Lakes Transp.

6 ParkerVision has not recorded any product sales revenues since 2005, when it stopped selling its

Wi-Fi products. See ParkerVision Inc., Annual Report (Form 10-K) (Mar. 30, 2012) at 6. (Lasher Decl. Ex. 5.)


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Holding LLC v. Yellow Cab Serv. Corp. of Fla., Inc., No. 10-80241-CIV, 2011 WL 465507, at *5-6 (S.D.

Fla. Feb. 4, 2011).

3. Chipset revenues are not likely to lead to the discovery of evidence relevant to any cited Georgia-Pacific factor.

Finally, ParkerVision’s assertion that chipset revenues are relevant to its Georgia-

Pacific analysis is also without merit. The financial information ParkerVision seeks on

additional Qualcomm chips is not relevant to Georgia-Pacific factors 8 or 13. Factor 8 concerns

the profitability of the patented product, which should be analyzed with financial information

for the smallest saleable patent-practicing unit; and factor 13 concerns the portion of the profit

that should be credited to the patented invention as distinguished from non-patented elements,

which should attempt to apportion the profits on the smallest saleable patent-practicing unit

between patented- and non-patented features. In other words, both factors relate to financial

information on the Exhibit B Products, but not the additional “chipset” products, which do not

include any allegedly patent-practicing feature. And, as set forth above, ParkerVision has

presented nothing other than speculation that sales of the Exhibit B Products drive demand for

other compatible chips Qualcomm sells, such that those sales may be “convoying” other sales,

within the meaning of Georgia-Pacific factor 6. While ParkerVision may assert that it needs the

widespread discovery it seeks to establish the basis for a convoyed sales analysis, “the Court

can weigh discovery burdens against the likelihood of finding relevant material.” Great Lakes

Transp., 2011 WL 465507, at *5. Where, as here, the proponent of discovery puts forth nothing

besides speculation to suggest that any admissible evidence would be discovered, the value of

the requested discovery, if any, is outweighed by the effort and expense of producing this

voluminous and sensitive information. See id.


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C. ParkerVision’s Demand for “Pre-Infringement” Revenue for Accused Products is a Contradiction in Terms, and Its Failure To Plead Properly Indirect Infringement Defeats ParkerVision’s Demand for Worldwide Sales Data.

Interrogatory No. 9, as drafted, does not include any date limitation for the

requested financial information. Qualcomm accordingly objected to the interrogatory as

“overbroad, unduly burdensome, and seeking information that is neither relevant nor

reasonably calculated to lead to the discovery of admissible evidence because it seeks

information about Qualcomm . . . products that were not sold within the United States or

imported into the United States within the permissible period for which ParkerVision may seek

relief.” (Dkt. 171, Ex. J at 15.) Qualcomm agreed to provide financial data starting in July 2005,

the six-year period prior to filing of the lawsuit for which ParkerVision may seek recovery. See

35 U.S.C. § 286. Moreover, for the reasons outlined above, the relevant products for any

damages analysis are the Exhibit B Products, and none of these chips was sold prior to 2007.

There are no “pre-infringement revenues” for these products.

In addition to the U.S. sales information that Qualcomm has already committed

to provide, ParkerVision asserts that “Qualcomm should be compelled to provide ParkerVision

with the information that it seeks, i.e., world-wide and U.S.-specific financial information.” (Dkt.

171 at 4 (emphasis added).) But Qualcomm’s worldwide sales revenues have no relevance to

ParkerVision’s direct infringement claims. They are relevant only to ParkerVision’s allegations

of indirect infringement, which this Court recently dismissed. (See Dkt. 150.) As set out in

detail in Qualcomm’s most recent, Motion to Dismiss ParkerVision’s Claims of Indirect

Infringement in its Third Amended Complaint (Dkt. 169), filed after the Court granted

ParkerVision leave to remedy the cited deficiencies in its First Amended Complaint,

ParkerVision has again failed to adequately plead indirect infringement in accordance with the

pleading standards the Court laid out in its dismissal order. In the face of those successive


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pleading failures, allowing ParkerVision to take discovery on Qualcomm’s worldwide sales

revenues would eviscerate the fundamental point of Twombly/Iqbal – eliminating costly

discovery concerning claims for which the plaintiff lacks any plausible factual basis at the

pleading stage. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) (“Rule 8 . . . does not unlock the

doors of discovery for a plaintiff armed with nothing more than conclusions.”). ParkerVision’s

request for Qualcomm’s worldwide financial data should be denied, unless the Court denies

Qualcomm’s pending motion to dismiss.

III. Third Party Correspondence

Carping that Qualcomm failed to “CC” ParkerVision on its written

communications with third parties relating to their compliance with the Rule 45 subpoenas

Qualcomm served on them early in discovery, ParkerVision has taken the extraordinary and

intrusive step of formally requesting from Qualcomm “[a]ll documents relating to any

correspondence or communication between Qualcomm (including its attorneys) and third-

parties/non-parties (including their attorneys) from whom Qualcomm has sought discovery in

association with this case.” (Dkt. 171 at 5.) This request should not be enforced.

A. Factual Background.

In early 2012, starting on February 27, Qualcomm issued 17 subpoenas to certain

third parties for documents relating to those third third-parties’ business interactions with

ParkerVision. Qualcomm served ParkerVision with a copy of each subpoena, and has

produced to ParkerVision all the documents produced thereunder.

ParkerVision now asserts that it is additionally entitled to receive copies of all

correspondence between Qualcomm and the subpoenaed third parties. During the August 13,

2012 meet and confer, counsel for ParkerVision took the position that Qualcomm was required

to produce such correspondence solely on the ground that ParkerVision wanted to verify that


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Qualcomm had not acted improperly while seeking third party discovery, such as by offering

monetary incentives to third parties to bias them against ParkerVision.

B. This Request Is Not Reasonably Calculated to Lead to Admissible Evidence, Nor is it Reasonably Related to Any Claim or Defense in this Action.

Discovery requests must be “reasonably calculated to lead to the discovery of

admissible evidence.” Fed. R. Civ. P. 26(b)(1) (emphasis added). In the Eleventh Circuit, “[i]t is

well established that ‘the discovery rules do not permit [a party] to go on a fishing expedition.’”

E.E.O.C. v. Southern Haulers, LLC, Civ. A. No. 11-00564, 2012 WL 1768064, at *3 (S.D. Ala. May

17, 2012) (holding that a “mere possibility” of discovering admissible evidence was insufficient

to permit discovery). To give the “reasonably calculated” standard force, the proponent of

discovery must offer some “reason” to think that a particular request will generate information

relevant to a party’s claim or defense. See, e.g., Ethypharm S.A. France v. Abbott Labs., 748 F.

Supp. 2d 354, 361 n.29 (D. Del. 2010) (“[D]enial of discovery is not abuse of discretion where a

plaintiff is unable to offer anything but rank speculation to support a claim and if discovery

would amount to nothing more than a fishing expedition.” (Internal quotation marks omitted)).

The sole proffered justification for this request is that the correspondence sought

might “reveal[] . . . any potential bias of the subpoenaed third parties towards ParkerVision.”

(Dkt. 171 at 23.) But ParkerVision has articulated no basis for its apparently paranoid belief that

any of the lawyer-to-lawyer correspondence would reflect any such bias. See, e.g., E.E.O.C. v.

Jack Marshall Foods, Inc., Civ. A. No. 09-0160, 2010 WL 55635, at *3 (S.D. Ala. Jan. 4, 2010) (“a

predicate to . . . discovery is a basis for believing it will uncover evidence [that is relevant]”).7

7 See also Food Lion, Inc. v. United Food and Commercial Workers Int’l Union, 103 F.3d 1007, 1014 (D.C.

Cir. 1997) (disallowing discovery requests that were intrusive and premised on unsupported speculation); In re Fontaine, 402 F. Supp. 1219, 1221 (E.D.N.Y. 1975) (“While the standard of relevancy [in discovery] is a liberal one, it is not so liberal as to allow a party ‘to roam in shadow zones of relevancy


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Conclusion

For the foregoing reasons, Qualcomm respectfully requests that this Court deny

ParkerVision’s Motion to Compel.

September 24, 2012

CRAVATH, SWAINE & MOORE LLP

By: s/ Keith R. Hummel Keith R. Hummel (admitted pro hac vice) (Trial Counsel)

[email protected] David Greenwald (admitted pro hac vice) [email protected] Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Telephone: (212) 474-1000 Facsimile: (212) 474-3700

-and-

BEDELL, DITTMAR, DEVAULT, PILLANS & COXE, P.A. John A. DeVault, III

Florida Bar No. 103979 [email protected] Courtney K. Grimm [email protected] Florida Bar No. 953740 The Bedell Building 101 East Adams Street Jacksonville, Florida 32202 Telephone: (904) 353-0211 Facsimile: (904) 353-9307

-and-

and to explore matter which does not presently appear germane on the theory that it might conceivably become so.’”).


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CADWALADER, WICKERSHAM & TAFT LLP

Christopher A. Hughes (admitted pro hac vice) [email protected] 1 World Financial Center New York, New York 10281 Telephone: (212) 504-6000 Facsimile: (212) 504-6666

-and- GOODWIN PROCTER, LLP

Steven A. Moore (admitted pro hac vice) [email protected] Richard W. Thill (admitted pro hac vice) [email protected] 4365 Executive Drive, Suite 3000 San Diego, CA 92121 Telephone: (858) 202-2700 Facsimile: (858) 457-1255

Counsel for Defendant, Counterclaim Plaintiff Qualcomm Incorporated


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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 24th day of September, 2012, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system which will send a notice of electronic filing to all counsel of record.

s/ Keith R. Hummel Keith R. Hummel (admitted pro hac vice) [email protected] Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Telephone: (212) 474-1000 Facsimile: (212) 474-3700 Attorney for Defendant, Counterclaim Plaintiff


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