Monnrs, NXGHOLS, Ansar St TUNNELL
1201 Nostra Manner Srirxesr
P.O. Box 1347
Wrrirrsrorou, Dnnawanr; l.9899wl‘3¤i7
302 658 9200
302 558 3989 FAX
MARYHLLEN NOREIKA
202 sts 7278
302 425 $011 an
mnoreii
BY E-FILING
The Honorable Joseph .1. Farnan, Ir.
United States District Court
844 N. King Street
Wilmington, DE 19801
RE: Trilciant Loyalty Solutions, Inc. v. Maritz, Inc.
Civil Action No. 04—360~JJF
Dear Judge Farnan:
ln advance of the discovery conference scheduled for April 25, 2005, Plaintiff
Trilegiant Loyalty Solutions, Inc. ("Tri1egiant") submits this statement of its position on disputes
relating to the production of documents.
This case involves claims for infringement of three patents (U.S. Patent Nos.
5,774,870, 6,009,4 l2, and 6,578,0l2) owned by Triiegiant. Those patents contain claims covering
Fully Integrated, On·1ine Interactive Frequency and Award Redemption Programs, invented by
Thomas Storey. Trilegiant was not involved in the conception of the inventions claimed in the
patents in suit, but purchased those patents from Netcentives, Inc. in 2001.
Since the last conference with the Court, the parties have made significant progress in
beginning discovery and working to resolve disputes. The parties have exchanged document
requests and interrogatories and responses, have negotiated and, with the one exception addressed
herein, agreed to the terms of a proposed protective order, and negotiated ways to resolve many of
the disputes arising from the exchange of discovery responses. There are, however, a handful of
issues on which the parties were unable to agree and, therefore, seek the Conrt’s assistance in
resolving these disputes.
Case 1:04-cv-00360-JJF Document 39 Filed O4/21/2005 Page 2 of 4
The Honorable Joseph 5. Farnan, Jr.
April 21, 2005
Page 2
A. Access to Highly Confidential information Under the Protective Order
The parties have agreed to all the terms of a proposed Protective Order but one;
whether designated in-house counsel will be permitted to review an opposing party’s highly
confidential information. Trilegiant opposes permitting in—house counsel to view highly confidential
infomation because of the sensitivity of the particular documents in issue and the increased risk of`
disclosure created by expanding the universe of distribution to in-house counsel.
Trilegiant does not mean to impugn the character of in-house counsel or their good
faith in attempting to comply with obligations imposed by this Court’s orders. Trilegianfs concerns
are two-fold. @, the nature ofMaritz’s proposed designated in-house counsel’s work often brings
him into discussions of business issues. The parties in this case are direct competitors in their
industry. Documents that will be exchanged in this case are of tremendous competitive significance,
including such sensitive documents as responses to requests for proposals to potential clients of both
parties, detailed financial data on product costs and profits, and the operational details of on—line
systems. Maritz’ s in—house counsel does work for the Maritz Loyalty Marketing Unit, the very group
that competes directly with Trilegiant. Having acquired certain information about, for example,
Trilegiant’s approach in responding to requests for proposals, it would be impossible for counsel to
avoid knowing — and potentially using — that infomation in advising in—house clients. There is no
indication that Maritz’s in—house counsel are so specialized that an attorney could avoid such a
problematic situation. Second, particularly with respect to infomation in electronic form, the risk of
inadvertent disclosure of highly confidential information to non-legal persons is dramatically
increased by allowing such materials to be sent to l\/laritz’s in—house counsel. The risks of such
harms are not balanced by any benefit to Maritz. Maritz’s expressed concerns about the ability to
provide advice to in—-house cotuisel can be addressed by the provision in the proposed Protective
Order specifically permitting outside counsel to render advice based on its review of highly
confidential information. Moreover, the highly confidential materials being produced by Trilegiant
are those that primarily go to damages, and are far removed from the central liability issues in the
litigation.
B. Issues Raised By l\/Iaritz’s Responses to Trilegiant’s Document Requests
l. The Scope of Maritz’s Production of Documents Relating to its
Products Other than VAULT
Trile giant has sought discovery concerning Maritz’s VAULT product, WARP product
and “other on-line incentive programs? Maritz agreed to produce documents concerning VAULT
but objected to producing documents concerning WARP and "other on-line incentive prograrns." In
an effort to resolve this dispute, the parties seek leave ofthe Court to permit a limited 30(b)(6)
deposition ofl\/laritz prior to the completion of document production concerning the nature of its on-
line products, including WARP. Such a deposition would allow Trilegiant to obtain sufficient
Case 1 :04-cv-00360-JJF Document 39 Filed 04/21 /2005 Page 3 of 4
The Honorable Joseph J. Farnan, Jr.
Aprii 21, 2005
Page 3
infomation about Maritz’s products to identify potentially infringing products and verify Maritz’s
representation about WARP. The parties have agreed that following that examination Trilegiant will
identify those products or services on which it seeks full discovery with the goal of reaching
agreement on the appropriate scope of discovery without the necessity for a ruling from the Court.
Should the parties be unable to agree on the scope of discovery by June I0, 2005, we request that the
Court schedule a short conference to address any outstanding issues.
2. Establishing a Schedule for l\/laritz’s Decision Concerning Reliance
on Advice of Counsel
In response to several of Trilegiant’s discovery requests, Maritz states that it has not
yet decided whether to rely on the advice of counsel in response to 'I`rilegiant’s allegations of willful
patent infringement. Maritz has also indicated that it may move to bifurcate the case. To allow these
issues to be resolved in an orderly manner and avoid delays in the completion of discovery,
Trile giant has proposed that the Scheduling Order be amended to include dates by which Maritz will
make its determination whether to rely on advice of counsel and by which any motion to bifurcate
must be made. Maritz has refused to set any dates for making these decisions. Trilegiant proposes
that the Scheduling Order be amended to require that i\/iaritz decide whether to rely on advice of
cotmsel by June l5, 2005 and that any motion to bifurcate be made by July I, 2005. (The close of
discovery is currently set for December 14, 2005.) Setting such a date will allow the Court adequate
time to address these issues before the end of fact discovery and avoid unnecessary delays in the
progress of the case to trial.
C. Issues Raised By Trilegiant’s Responses to Maritz’s Document Requests
l. Limiting the Scope of Trilegiant’s Production to the Relevant Time
Frame
Many of Maritz’s doctunent requests seek documents going back a decade to 1995.
The tirst of the patents in suit did not issue until 1998. Moreover, Trilegiant did not acquire the
patents in suit until 2001 when the patents were purchased irorn Netcentives, Inc. For that reason,
Maritz’s requests seeking, for example, Trilegianfs financial information back to l995 are unduly
burdensome and that information is not relevant to any issue in this litigation. Maritz has not
articulated a reasonable basis for believing that documents relating to Trilegiant’s tinances and
products years before it owned the patents would lead to the discovery ofadmissibie evidence on any
issue in the case. In the absence of any demonstration of relevance of Trilegiant documents for that
period, which could more than double the scope of production, "l`rilegiant’s limitation of its
production to 200l should be upheld.
Case 1:O4—cv-00360-JJF Document 39 Filed O4/21/2005 Page 4 of 4
The Honorable Joseph J. Farnan, Jr.
April 21, 2005
Page 4
2. Limiting the Production of Documents Relating to Trilegiant’s
Development of its Own On-line Incentive Programs
Maritz seeks extremely broad discovery relating to Trilegiant’s on—line incentive
programs. Trilegiant has agreed to produce documents relating to the purchase, advertising, sale and
implementation of Trilegianfs products during the relevant time period, as well as numerous other
specific categories of documents. Trilegiant has objected, however, to Maritz’s request that
Trilegiant produce all documents relating to the development of any program, method or system
allegedly covered by one or more of the patents at issue, which would include a broad array of
documents with no relevance to any disputed issue in this case. Nothing in the development of
'l`rilegiant’s products before they owned the patents is relevant tothe issue ofMaritz’s infringement
or the validity of the patents in suit. Because the burden of searching and producing such documents
is substantial and such documents are not relevant to any issue in this case, Trilegiant’s objection to
producing its development documents should be upheld.
Respectfully,
/s/ Maryellen Noreika
l\/iaryellen Noreika
MN/bis
cc: Peter T. Dalleo, Clerk (By Hand)
Patricia Smink Rogowski, Esquire (By Hand)
J. Bennett Clark, Esquire (By Fax)
461734
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