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Dear Judge Andrews:
ChanBond has engaged in classic misuse of privilege, applying it as both sword and
shield, to suit its convenience. Not only has ChanBond made improper assertions of privilege
that have prevented Defendants from obtaining relevant testimony, ChanBond has refused to
provide sufficient detail in its privilege log that would permit Defendants to evaluate whether the
purported claims of privilege are proper.
I. Relevant Factual Background. In 2012, the named inventors and owners of
CBV1 – Messrs. Hennenhoefer, Snyder, and Stine – marketed their patent portfolio, including the
asserted patents, for sale. In pursuit of that effort, CBV authorized its patent attorney, Patrick
Keane, to
(emphasis in original).
In October 2013,
Ex. D (CHANBOND-12194-5); Ex. E (Carter Tr.), 54:2-9, 29:10-14. In August
2014, ChanBond, LLC was formed
Ex. E (Carter Tr.), 52:25-53:6; 54:6-9.
Ex. E (Carter Tr.), 54:2-9, 29:10-14. On April 9, 2015,
Id. at Ex. F (CHANBOND-001498-51).
Shortly after this case was filed in 2015,
Ex. G (CHANBOND-11835-869).
Ex. E (Carter Tr.) at 20:18-21:2.
All of the relevant documents from CBV and Ms. Leane in her role with IP Navigation and
ChanBond have been turned over to litigation counsel for ChanBond. Further, all of the
Plaintiff-related entities – Z-Band, CBV, ChanBond, Unified Online, and those entities’
respective attorneys – are represented by ChanBond’s litigation counsel.
1 CBV was a holding company formed by the named inventors, and into which the patent
applications were transferred in 2008. Ex. I (Stine Tr.) at 218:22 – 219:14. The inventors also
had an operating company, Z-Band, which was the original patent assignee. Id.
Case 1:15-cv-00842-RGA Document 259 Filed 05/10/18 Page 2 of 6 PageID #: 10596
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II. The Offer for Sale Through AST Is Not Privileged. There is no dispute that
Idenix Pharmas., Inc. v.
Gilead Sci., Inc., 195 F. Supp. 3d 639, 644 (D. Del. 2016) (holding communications nonprivileged
“f the primary purpose . . . is to solicit or render advice on non-legal matters”).
Accordingly, Defendants ask the Court to reopen the deposition of Mr. Keane regarding CBV’s
marketing efforts.
III. The ChanBond and UOL’s Materials Are Not Privileged. In connection with
its acquisition of the ChanBond patents in October 2015,
UOL and CB Capital
produced the final valuation in response to subpoenas from Defendants, and its witnesses
testified about it. The valuation utilizes multiple methodologies, one of which yielded a
figure, based on
Ex. E (Carter Tr.), 214:5-215:8, 216:10-218:18 (discussing
at Ex. J (UNIFIED000001-174) at UNIFIED_000011). The final valuation also
contained another methodology See Ex. J
(UNIFIED000011) ; Ex. K (CBCAP_000574).
Despite producing the final valuation containing multiple figures, UOL and CB Capital
have purported to claim privilege over the documents underlying both methodologies, including
documents that ChanBond (the seller) sent to CB Capital, the financial analysis firm of UOL (the
purchaser). See e.g., Ex. L (CB Capital Privilege Log) at No. 7 (Leane of ChanBond to CB
Capital
. Those documents are undoubtedly relevant to issues of damages.
See Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731, at *3 (D. Del. Feb. 9,
2018). It cannot be that the final valuation is not privileged, but the underlying documents are—
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either all are, or none are. See Net2Phone, Inc. v. Ebay, Inc., No. CIV.A. 06-2469 KSH, 2008
WL 8183817, at *12 (D.N.J. June 26, 2008). ChanBond has never claimed privilege to these
final valuations, presumably because they help its case. As such, Defendants request an order to
produce valuation materials ChanBond provided to UOL/CB Capital, and vice-versa.
IV. ChanBond’s Deficient Privilege Log. In ChanBond’s first privilege log, served
on February 26, 2018, the “description” for each of the 1,300 entries is nothing more than a
conclusory statement that the withheld document “
or was .” Ex. M (ChanBond’s Priv. Log). The log
also failed to identify whether communications were sent to/from an attorney. Defendants
immediately identified these deficiencies and asked ChanBond to supplement to include
sufficient information so as to allow Defendants to “assess the claim,” which necessarily
included an identification of the date, author, recipient(s), and a brief description of the subject
matter of the communication or document. See Ex. N (Feb. 28, 2018 Letter) at 2 (citing Fed. R.
Civ. P. 26(b)(5)(ii); Affinion Net Patents, Inc., C.A. No. 04-cv-360-JJF (D. Del. Aug. 23, 2006);
Endeavor Energy Resources, L.P. v. Gatto & Reitz, LLC, C.A. No. 13-cv-542, 2017 WL
1190499, at *14 (W.D. Pa. Mar. 31, 2017)). On March 9, 2018 ChanBond served a First
Amended Privilege Log, but rather than address these deficiencies, the amended log relies on the
same conclusory descriptions as the original log. Ex. O (ChanBond’s 1st Amended Priv. Log).
Defendants renewed their request, and pointed ChanBond to the level of description found in the
privilege log of ChanBond’s affiliate Z-Band. Ex. P (Mar. 21, 2018 Brody to Raskin).
Despite these repeated requests, ChanBond has refused to supplement its log with
adequate descriptions. Ex. Q (Apr. 11, 2018 Brody to Raskin). The only substantive update
ChanBond has provided is a list of attorneys to help identify potential attorney-client
communications. Ex. R (Mar. 9, 2018 Attorney List). But even with that list, the amended log
still claims privilege/work product over entries for which no attorney is disclosed. See, e.g., Ex.
O, Entries 13, 19-21 (IP Nav to File); Ex. O, Entries 22-23 (alleged work product and common
interest documents without attorneys listed). And even this disclosure of attorneys appears
incomplete. For example, ChanBond asserts that documents
, are privileged based on . Ex. S
(Apr. 27, 2018 Whitman to Padmanabhan). But patent agent communications are only
privileged when the agent is acting under the direction of an attorney, during patent prosecution
activities, or when representing a party in a proceeding (e.g., USPTO proceeding). E.I. du Pont
de Nemours & Co. v. MacDermid, Inc., Case No. 06–3383-MLC, 2009 WL 3048421, at *4-5 (D.
NJ Sept. 17, 2009). None of those scenarios is applicable here.
It is ChanBond’s burden to show that the documents are entitled to a claim of privilege.
In re Joy Global, Inc., No. 01-039-LPS, 2008 WL 2435552, at *4–5 (D. Del. June 16, 2008).
Courts have held that where a party fails to meet that burden, production of the withheld
documents is an appropriate remedy. Schwarz Pharma, Inc. v. Teva Pharmas. USA, Inc., 2007
WL 2892744, at *2 (D.N.J.2007) (finding that the appropriate sanction for failure to provide a
legally sufficient privilege log is production of the logged documents). Should ChanBond refuse
to supplement, or fail to adequately supplement its privilege log to meet the requirements of the
Federal Rules, ChanBond should be ordered to produce the withheld documents.
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Respectfully,
/s/ Jennifer Ying
Jennifer Ying (#5550)
Counsel for Defendants
cc: Clerk of Court (by hand)
All Counsel of Record (by e-mail)
