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Case 1 :04-cv-01338-JJF Document 1110 Filed 08/01 /2008 Page 1 of 4
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YOUNG CONAWAY STARGATT & TAYLOR, LLP
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July 25, 2008
JIQEDAVCTED BLIC VERSION
BY E-FILE AND HAND DELIVERY
The Honorable Vincent J. Poppiti
Blank Rome LLP
1201 North Market Street, Suite 800
Wilmington, Delaware 19801
· Re: Honeywell International Inc., et al. v. Apple Computer, Inc., et al.,
C.A. No. 04-1338-JJF
Dear Judge Poppitl: A
· We represent_Sony Corp. ("Sony") and respectfiilly submit this letter in reply to
Honeywell’s letter dated July 18, 2008.
` Although Sony recognizes that the issues immediately before Your Honor are
primarily procedural, Sony already has made a prima facie showing sufficient to demonstrate
that the LCD modules present in Sony’s accused consumer electronics products are made by
manufacturers who are licensed under Honeywell’s ’371 patent. Honeywell has never rebutted
this showing or offered any plausible rationale to suggest its claims to those modules are not
exhausted. Honeywell now bears the burden to identify specifically the reasons why it claims
that Sony does not benefit tirom the licenses of its suppliers. Honeywell had made no such
showing to date.
Honeywell’s letter proposes a convoluted series of procedural hurdles for Sony
and 1ts co—defendants to jump, many of them on issues that Honeywell can resolve on its own.
Honeywell’s request that Sony obtain declarations from the licensed, third-party LCD module
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Case 1 :04-cv—O1338-JJF Document 1110 Filed 08/O1/2008 Page 2 of 4
Youric CONAWAY STARGATT & TAYLOR, LLP
The Honorable Vincent J. Poppiti .
July 25, 2008
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makers is unreasonable, particularly in light of the case management directives in place.
Similarly, Honeywell’s request that Sony undertake a company-wide search across all product I
lines to confirm that no LCD modules made by Optrex or Samsung SDI are used violates Judge
J ordan’s prior case management orders and far exceeds to scope of the Special Master’s charge
from Judge Farnan. Honeywell’s attempt to prevent Sony (and the other customer defendants)
from being dismissed from this litigation should be denied.
Sony Has Met Its Burden to Show Exhaustion
While Honeywell argues that the burden is on the customer defendants to prove a
licensing defense (which Sony does not contest), it refuses to acknowledge that Sony has already
come forward with a prima facie case that its accused products use authorized LCD modules.
Honeywell, on the other hand, has not responded with any specific reasons why the accused
products do not benefit from those license agreements.
As set forth in Son ’s Jul 18th letter to Your Honor the accused Sony products
contain LCD modules made by who all have purchased ’
licenses Hom Honeywell. Honeywe l has not responded in substance to date. It has merely
referred to certain limitations of the supplier licenses as possibly limiting the applicability of the
license and/or scope of authorized modules. Given that Sony has established the existence of
these license agreements and their relationships to Sony’s accused products, the burden has now
shifted to Honeywell to come forward with particularized contentions as to why it believes the
specifically accused Sony products do not fall within
license agreements.
This burden is rightfully Honeywell’s. This is no different from the situation that
would occur if Sony had brought a summary judgment motion based on a license defense. In
that scenario, Honeywell, of course, would have to come forward with genuine issues of material
facts as to why the license agreements do not apply. Generalized allegations based on certain
provisions in the license agreement without more would be insufficient to defeat summary ‘
judgment. The same standard should apply in these proceedings. If Honeywell is not required to
make this preliminary showing, then Sony would be forced to prove a negative, i. e., that the
LCD modules found in its accused products do not fall within the scope of the license
agreements. Sony should not be forced to undertake a protocol that is wholly tmnecessary and
unduly burdensome to satisfy Honeywell when it has failed to meet its burden.
Further, although some of Honeywell’s licenses define conditions under which
the licenses terminate,-these same licenses define mechanisms that permit Hone ell to
investigate itself whether the termination conditions are met. (See, e. g. “
) Honeywell’s proposals in its_ July 18 letter
are p rcu ar y unreasona e w ere Honeywell can (and prestunably does) investigate such
issues as part of its normal contract administration processes. _
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YoUNo CoNAwAY STARGATT & TAYLOR, LLP
The Honorable Vincent J. Poppiti l
July 25, 2008
Page 3
Since Honeywell is unable to articulate any specific reasons why the license
in agreements do not apply to the LCD modules used in the accused Sony products, Sony has
satisfied its burden of proving a license defense and dismissal from the litigation is appropriate.
Declarations From Licensed LCD Module Makers `
As a preliminary matter, Sony notes that Honeywell did not request declarations
from the licensed LCD module makers during the parties’ meet and confer.1 lt appears that
Honeywell is now requesting that Sony obtain declarations from the license module makers.
Sony objects. Not only is Honeywell changing its position, Sony should not be forced to obtain
these declarations because: 1) as shown above, it has made a prima facie showing that it benefits i
from its suppliers’ licenses, 2) also as shown above, Honeywell has offered no rebuttal to Sony’s
showing, and 3) Honeywell relinquished this discovery when it chose not to sue the L
manufacturers that supply the LCD modules found in the accused Sony products back in the Fall
of 2005.
On October 7, 2005, Judge J orda.n ordered the customer defendants to identify the
manufacturers of the LCD modules used in the products that had been s ecificall accused by
Honeywell. (Order, 15.1. 237, p. 5.) Sony did S0. ir rdrnrrardér
October 28, 2005. (Letter from R. Hails to M. Woods dated October 28, 2005 (attached as
Exhibit B)) Within 30 days of that identification, Honeywell was required to amend the
complaint or bring a new complaint to sue any of the identified manufacturers. (Order, D.l. 23 7,
V p. 5.) lf Honeywell chose to sue an additional manufacturer, the customer defendants were
ordered to assist Honeywell by forwarding a copy of the complaint or amended complaint to the
manufacturer, to provide the manufacturers with the contact information for Honeywell’s
attorneys, and to persuade the manufacturers to waive formal service of process. (Id, p. 6.)
With res ect to the four manufacturers identified by Sony, Honeywell passed on ,
adding s defendants. If Honeywell had any concerns that these
licensed manufacturers were selling unauthorized LCD modules, then it should have sued them.
Honeywell did nothing, presumably because it knew it had no claim against any of these parties
and could not advance a claim against them and simultaneously meet its Rule ll obligations to
the Court. lt reached this conclusion without need for any declaration from those manufacturers
—— the license agreements were sufficient on their face. So, too, here. The Special Master can i
resolve the licensed supplier issue without the need for declarations on issues for which there is
no serious dispute.
X Sony summarized its understanding of the requests being made by Honeywell for dismissal during the meet
and confer in a letter dated June 27, 2008 from Michael Shen to Matt Woods (attached as Exhibit A). Honeywell
did not respond to this letter contesting Sony’s understanding.
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Case 1 :04-cv-01338-JJF Document 1110 Filed 08/01 /2008 Page 4 of 4 ·
Youno CoNAwAY STARGATT & TAYLOR, LLP
The Honorable Vincent J. Poppiti
July 25, 2008 -
Page 4
Ogtrex/Samsung SDI Declaration
As explained in Sony’s July 18th submission, Honeywell’s demand that Sony
perform a company-wide search across its numerous product lines to confirm that no LCD
modules are made by Optrex or Samsung SDI is entirely unreasonable, and certainly outside the
scope of this proceeding. For the pmpose of this investigation, the Special Master has been
asked to determine only whether Sony products accused by Honeywell include modules that are
licensed under the patent in suit. (Transcript, April 2, 2008 Status Conference, pp. 14-16.)
Honeywell has not identified any Sony product that contains an Optrex or Samsung SDI module
and, therefore, Honeywell’s request far exceeds the scope of the inquiry assigned to the Special
Master.2
` Sony fmnly believes that dismissal is appropriate, and looks forward to discussing
these issues with your Honor on July 30th.
_ Respectfully submitted,
g/@’zc¢¢@
Michele Sherretta Budicak (No. 4651)
cc: Robert L. Hails, Esquire (Of Counsel) ,
Michael M. Shen, Esquire (Of Counsel)
John W. Shaw, Esquire
Z Honeywell’s request also is unreasonable because it expects Sony to undertake an investigation that
Honeywell should have performed itself in discovery. Optrex and,Samsung SDI both are active parties in the
litigation. Honeywell had ample opportunities to discover Op1:rex’s and Samsung SDI’s sales, seeking the Court’s
assistance if necessary. If Honeywell did not avail -itself of its opportunities, it should not be permitted to seek this
infomiation from Sony or the other customer defendants. Honeywell’s request is particularly burdensome on Sony,
who sells hundreds if not thousands of consumer electronics products that contain LCD modules. Accordingly,
Sony requests that the Court reject Honeywell’s request to require an investigation of any purchase of Optrex and/or ~
Samsung SDI modules.
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