Technipower Systems, Inc.(fka TECZ)

[DD-214]

SOLM's Memorandum in support.. filed June 30, 2009

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
____________________________________
)
SOLOMON TECHNOLOGIES, INC., )
)
Plaintiff, )
v. ) CASE NO. 8:05-cv-01702-JDW-MAP
)
TOYOTA MOTOR CORPORATION, )
TOYOTA MOTOR SALES, U.S.A., INC., )
TOYOTA MOTOR ENGINEERING AND )
MANUFACTURING NORTH AMERICA, )
INC., and TOYOTA MOTOR )
MANUFACTURING KENTUCKY, INC., )
)
Defendants. )
____________________________________)
TOYOTA’S MOTION SUPPORTING DISPUTED TEXT
OF STIPULATED PROTECTIVE ORDER
I. THE PARTIES SUBMIT NINE DISPUTED WORDS FOR THE COURT’S
RESOLUTION
Because Toyota feared that Dr. Emadi would benefit and that Toyota would suffer
from Dr. Emadi’s access to Toyota’s confidential information, Toyota opposed
Solomon’s motion to give him access to its confidential documents produced in the ITC
proceeding, or in this action. (Dkt. 46) After the December 11, 2008 hearing, Toyota
sought to negotiate a Stipulated Protective Order (“SPO”) that would allow Dr. Emadi
access to Toyota’s confidential documents, but would protect Toyota’s interests.
Solomon and Toyota then reached agreement on the terms of an SPO, except for nine
words: “or information or ideas derived therefrom by such person.” Toyota wishes to
include these words in the SPO, and Solomon does not.
The parties submitted the proposed SPO on June 30, 2009, and the disputed text is
found in three places in paragraph 8(d). The disputed obligation applies equally to
Solomon’s expert and any experts Toyota may use in this action.
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 1 of 7
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The parties agreed to make simultaneous, one-time submissions on this issue at
5:00 pm today. The parties agreed not to file oppositions to the motions filed today, and
that the Court should proceed to resolve this issue on the basis of today’s simultaneous,
one-time submission of each side.
II. THE DISPUTED OBLIGATION IS NECESSARY TO PROTECT
TOYOTA
Toyota has always feared that Dr. Emadi, who owns patents and patent
applications in Toyota’s field, which is also the field of this lawsuit, would learn from
Toyota’s confidential documents and use that windfall knowledge to beef up his patent
applications or bolster his business, and that he could assert such patents against Toyota.
Thus, Toyota’s concern is not only with the consequences of Dr. Emadi’s access to its
confidential documents, but also with the information and ideas he might derive from
them. After all, any such uses Dr. Emadi makes of Toyota confidential documents would
inherently involve information or ideas he derives from them. Toyota therefore included
in the proposed SPO a provision that obligates Dr. Emadi not to use any of Toyota’s
confidential documents, or information or ideas derived from such documents, to beef up
his patent applications, benefit his business, or sue Toyota. Solomon’s position is that
“Dr. Emadi will not agree to sign onto a protective order that includes Toyota’s
additional language.” (O’Shaughnessy Decl., Ex. 1)
The very fact that Solomon and Dr. Emadi rejected this obligation shows not only
that Toyota’s concern is valid, but also that -- absent such an obligation -- Dr. Emadi will
be free to use information or ideas derived from Toyota’s confidential documents in
precisely the ways that Toyota fears. In fact, why wouldn’t Dr. Emadi agree to such an
obligation unless he wished to preserve such options? If he will not sign the SPO
containing the disputed obligation, then he has no business seeing Toyota’s confidential
documents.
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III. DR. EMADI IS A TECHNOLOGY COMPETITOR
As explained in Toyota’s Opposition to Solomon’s Motion to Grant Solomon’s
Expert, Professor Emadi, Access to Documents Designated Confidential by Toyota, or, in
the alternative, to Withdraw the Confidentiality Designations From Those Documents
(Dkt. 46), which Toyota incorporates by reference, Dr. Emadi is a direct technology
competitor of Toyota. He has obtained multiple U.S. patents in the field of hybrid and
automotive technologies, and he is currently pursuing numerous additional patent
applications in this field. He is the Chief Technology Officer of Hybrid Electric Vehicle
Technologies, Inc., an Illinois Institute of Technology start-up company, to which he
assigned his patents. His patents and applications fall precisely into the field of
technology of Toyota’s confidential documents and the subject matter of this action.
Solomon alleged in its earlier motion that Dr. Emadi does not currently make, use,
or sell any automotive systems. He does, however, procure patents in this field, and
therefore competes with Toyota for the control of the relevant technology through
patents. Why would he obtain such patents, if not to license or sue? As evidenced by
this very action, patents can be used to compete with Toyota for the control of underlying
technology even if the patent owner does not make and sell cars. As Toyota explained to
Solomon in negotiating the SPO, Dr. Emadi therefore must be obligated not to use
information or ideas he derives from Toyota confidential information to his benefit or
Toyota’s detriment. If he is not so obligated, there will be nothing to stop him from using
information or ideas he derives from Toyota confidential information in any way he
wishes. This problem therefore goes way beyond this lawsuit, in scope and time.
Absent the disputed obligation, Dr. Emadi could use information or ideas derived
from Toyota’s confidential information to file new patent applications or to amend his
pending applications for hybrid vehicles and systems, to cover Toyota’s products or
simply to broaden the scope of his applications in ways that he would not have had the
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 3 of 7
4
knowledge to do, absent his access to Toyota’s confidential information. Once Dr.
Emadi obtains such broadened patents, he could also turn around and sue Toyota for
infringing them. Dr. Emadi also could use information or ideas derived from the Toyota
documents to benefit his business in other ways. For example, he could obtain a headstart
from Toyota’s technical work product, or could learn of technological dead ends.
Toyota may never know if Dr. Emadi and his business benefit in this latter way from
Toyota’s confidential technical information.
It is therefore crucial to Toyota that Dr. Emadi be obligated not to use any
information or ideas derived from Toyota confidential information to sue Toyota or to
benefit his patent applications or business, and it would be fundamentally unfair to
Toyota not to obligate him in these ways. In fact, paragraph 8(d) of the SPO is
essentially meaningless without this obligation.
IV. THE LAW SUPPORTS THE DISPUTED OBLIGATION
Solomon has no legitimate basis for refusing the disputed obligation. The
disputed text, which precludes Dr. Emadi from benefiting from ideas derived from
Toyota’s confidential information, is typical. For example, the Eastern District of
Michigan recently entered a protective order providing:
“5. Confidential Information, Highly Confidential
Information, and information derived therefrom shall be
used by the party receiving it (the "Receiving Party") solely
for purposes of the ATI Litigation and shall not be used for
any other purpose, including, without limitation, any
business, proprietary, commercial, legal/litigation,
governmental purpose or in connection with the preparation
or prosecution of any patent application.”
Auto. Techs. Int'l, Inc. v. Siemens VDO Auto. Corp., 2009 U.S. Dist. LEXIS 11249 (E.D.
Mich. Feb. 13, 2009) (emphasis added). Other district courts have permitted similar
restrictions in protective orders. See, e.g., Fanjoy v. Calico Brands, Inc., 2006 U.S. Dist.
LEXIS 55158, *22 (D. Utah Aug. 7, 2006) (“All other parties and counsel shall not
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 4 of 7
5
disseminate such Confidential Material (which includes material produced and
information derived therefrom) … [and] shall use such Confidential Material only for
purposes of this civil action and for no other action, and not for any business or other
commercial purpose”) (emphasis added), and Ring Indus. Group, LP v. E Z Set Tank Co.,
2008 U.S. Dist. LEXIS 48668 (W.D. N.C. June 11, 2008) (all information derived
therefrom … shall not be disclosed, given, shown, made available or communicated in
any way.”).
Moreover, Dr. Emadi cannot make any use of the option he apparently wants to
preserve. Under 35 U.S.C. § 102(f), it is impermissible for a person to seek patent
protection for ideas derived from such information. Section 102(f) provides that a person
may not obtain a patent if “he did not himself invent the subject matter sought to be
patented.” 35 U.S.C. § 102(f). Thus, a patent is invalid if it names as an inventor a
person who did not actually invent the claimed subject matter but derived the invention
from another. See, e.g., Eaton Corp. v. Rockwell Int'l Corp., 323 F.3d 1332, 1344 (Fed.
Cir. 2003). If Dr. Emadi were to seek patent protection on technology derived from
Toyota’s confidential information, any such patents would be invalid. However, Toyota
may not know that he did so, and therefore would be unable to challenge such patents.
Thus, it is important to obligate Dr. Emadi not to use information or ideas derived from
Toyota confidential documents, and such an obligation is consistent with § 102(f).
V. ON BALANCE, THE NEED FOR THE DISPUTED OBLIGATION
OUTWEIGHS ANY RISK OF A BASELESS ALLEGATION OF BREACH
Solomon’s sole reason for opposing this obligation is that Solomon and/or Dr.
Emadi fear that Toyota may file a claim against him, without evidence, for violating the
disputed provision (see O’Shaughnessy Decl., Ex. 1). This is obviously unlikely, and on
balance is less likely than the possibility that Dr. Emadi will use information or ideas he
derives from Toyota’s confidential documents to his benefit and/or to Toyota’s detriment
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 5 of 7
6
if the SPO essentially says that he is free to do so. In fact, Dr. Emadi surely will believe
that he is expressly authorized to do so if this Court strikes the disputed obligation from
the SPO. Thus, deleting the disputed words from the SPO is worse than if they were
never there.
Solomon’s and Dr. Emadi’s fear of a baseless claim of breach is unfounded for
another reason: Toyota is unlikely to know one way or the other whether Dr. Emadi
honors his obligations under the SPO, and therefore it is crucial that his obligations must
be broad enough to protect Toyota’s interests in absentia.
VI. CONCLUSION
For the reasons stated above, Toyota respectfully urges this Court to include the
phrase “or information or ideas derived therefrom by such person” in the three places
where it appears in paragraph 8(d) of the SPO jointly submitted to the Court on June 30,
2009.
June 30, 2009 Respectfully submitted,
s/Michael V. O’Shaughnessy
Thomas W. Winland
John F. Hornick
James R. Barney
Michael V. O'Shaughnessy
Hayley S. Weimer
Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP
901 New York Ave., NW
Washington, DC 20001
Phone: [phone]
Fax: [phone]
William C. Guerrant, Jr.
Florida Bar No. 516058
[e-mail]
Trial Counsel
HILL, WARD & HENDERSON, P.A.
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 6 of 7
7
Suite 3700 – Bank of America Building
101 East Kennedy Boulevard
Post Office Box 2231
Tampa, Florida 33601
Telephone: [phone]
Facsimile: [phone]
Counsel for Defendants Toyota Motor
Corporation, Toyota Motor Sales, U.S.A.,
Inc., Toyota Motor Engineering and
Manufacturing North America, Inc., and
Toyota Motor Manufacturing Kentucky, Inc.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on June 30, 2009, 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 Katherine C. Conlon, Fowler, White, Bogs, Banker, P.A., 501 East
Kennedy Boulevard, Suite 1700, Tampa, Florida 33602.
s/Michael V. O’Shaughnessy
Attorney
Case 8:05-cv-01702-JDW-MAP Document 72 Filed 06/30/2009 Page 7 of 7
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
____________________________________
)
SOLOMON TECHNOLOGIES, INC., )
)
Plaintiff, )
v. ) CASE NO. 8:05-cv-01702-JDW-MAP
)
TOYOTA MOTOR CORPORATION, )
TOYOTA MOTOR SALES, U.S.A., INC., )
TOYOTA MOTOR ENGINEERING AND )
MANUFACTURING NORTH AMERICA, )
INC., and TOYOTA MOTOR )
MANUFACTURING KENTUCKY, INC., )
)
Defendants. )
____________________________________)
DECLARATION OF MICHAEL V. O’SHAUGHNESSY
I, Michael V. O’Shaughnessy, do hereby declare:
1. I am an attorney with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP,
counsel for the Toyota Defendants in the above captioned case;
2. Attached hereto as Exhibit 1 is a true and correct copy of email correspondence
from K. Stein to J. Hornick, dated June 12, 2009.
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct to the best of my knowledge, information and belief.
Executed on June 30, 2009 s/Michael V. O’Shaughnessy
Michael V. O’Shaughnessy
Case 8:05-cv-01702-JDW-MAP Document 72-2 Filed 06/30/2009 Page 1 of 1
Exhibit 1
Case 8:05-cv-01702-JDW-MAP Document 72-3 Filed 06/30/2009 Page 1 of 4
O'Shaughnessy, Michael
From: Stein, Kenneth L. [[e-mail]]
Sent: Friday, June 12, 2009 4:09 PM
To: Hornick, John
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
Follow Up Flag: Follow up
Flag Status: Orange
6/28/2009
John,
We continue to believe that the phrase “or information or ideas derived therefrom” is unduly vague. The only purpose of that language is to cover a
situation in which Toyota suspects that Solomon’s expert improperly used Toyota’s Confidential Information but cannot link that suspicion to any
particular piece of confidential information. But that is precisely why we and Dr. Emadi find the language unacceptable—it permits Toyota to make a
claim against Dr. Emadi based on mere suspicions, even when Toyota has no evidence that he improperly used Toyota’s Confidential Information.
Again, if such evidence existed, Toyota would not need to rely upon the additional language. We also note that Toyota’s additional language is not
included in the sample protective order that Judge Pizzo recommended to the parties.
Dr. Emadi will not agree to sign onto a protective order that includes Toyota's additional language. In addition, Dr. Emadi wants the following language
added to Paragraph 8—“CONFIDENTIAL INFORMATION in this paragraph does not include information already formed by said expert or reasonably
known to one skilled in the art.”
Since the parties appear to be at an impasse, I propose that the parties submit a stipulated protective order with alternative language for Paragraph 8
(and any other paragraph where we cannot reach agreement), along with briefing, perhaps in the motion for entry of the stipulated protective order,
setting forth the parties’ respective positions. Please let me know if that proposal is acceptable to Toyota.
Regards,
Ken
From: Hornick, John [mailto:[e-mail]]
Sent: Wednesday, June 03, 2009 10:56 PM
To: Stein, Kenneth L.
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
Dear Ken:
We were unavailable today and will be unavailable Friday. We can speak early next week if you like. However, as we said in our 4/14/09 4:35pm email, Toyota is not agreeable to
the proposed deletion of "information or ideas derived therefrom" from paragraph 8(ii) and 8(iii) of the draft SPO. Dr. Emadi's risk of being challenged by Toyota -- without evidence -
- for a violation of this obligation is nil. The issue from Toyota's perspective is the breadth of Dr. Emadi's obligation. It must be broader than you are asking. Toyota is particularly
concerned about derivative ideas or information, and therefore this obligation is necessary. Toyota does not view the general restrictions of the SPO as sufficient to protect its
interests. If you wish to arrange a time to talk, please let us know.
Sincerely,
John
From: Stein, Kenneth L. [mailto:[e-mail]]
Sent: Tuesday, June 02, 2009 5:14 PM
To: Hornick, John
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
John,
The parties appear to be very close to an agreement concerning Emadi's access to Toyota's documents. However, after careful consideration, we cannot agree to include the
phrase "or information or ideas derived therefrom" in paragraphs 8(ii) and 8(iii) of the draft SPO. The issue we have with that phrase is that it is, in our view, unduly vague
and would permit Toyota to make a claim against Dr. Emadi even when there is no evidence that he improperly used Toyota's confidential information. We also believe that,
even without that phrase, the SPO would protect Toyota against the use of its confidential information for any purpose other than this Action, including the uses specified in
Paragraph 8.
Given how close the parties are, I think it would make sense to get on the phone and see if we can reach an agreement without involving the Court. Please let me know if you
are available to discuss this issue tomorrow between 10 am and 3 pm or anytime Friday.
Thanks.
Ken
From: Hornick, John [mailto:[e-mail]]
Sent: Tuesday, April 14, 2009 4:35 PM
To: Stein, Kenneth L.
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
Dear Ken:
Toyota is not agreeable to the proposed deletion of "information or ideas derived therefrom" from paragraph 8(ii) and 8(iii) of the draft SPO. The other changes to para. 8 are
fine. We look forward to receiving your comments on the remainder of the draft SPO.
Case 8:05-cv-01702-JDW-MAP Document 72-3 Filed 06/30/2009 Page 2 of 4
Sincerely,
John
John F. Hornick
Attorney at Law
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
901 New York Avenue, NW, Washington, DC 20001-4413
202.408.4076 | fax [phone]| [e-mail] | www.finnegan.com
From: Stein, Kenneth L. [mailto:[e-mail]]
Sent: Wednesday, April 08, 2009 11:49 AM
To: Hornick, John
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
John,
Attached are our proposed revisions to paragraph 8 to your draft SPO. I will send you our comments on other provisions later, but would like to address paragraph 8
first, since it relates to Prof. Emadi's access to Toyota's documents.
Please let me know if our proposed changes are acceptable to Toyota. If not, please let me know if you are available tomorrow or Firday (April 9 or 10) to discuss this
matter.
Regards,
Ken
From: Hornick, John [mailto:[e-mail]]
Sent: Monday, March 23, 2009 6:33 PM
To: Stein, Kenneth L.
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: RE: Solomon v. Toyota
Dear Ken:
A draft of the proposed SPO is attached. We look forward to receiving your comments.
Sincerely,
John
John F. Hornick
Attorney at Law
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
901 New York Avenue, NW, Washington, DC 20001-4413
202.408.4076 | fax [phone]| [e-mail] | www.finnegan.com
From: Stein, Kenneth L. [mailto:[e-mail]]
Sent: Monday, March 23, 2009 10:55 AM
To: Hornick, John
Cc: Diamante, Joseph; Barney, James; O'Shaughnessy, Michael; Dunn, Michael; An, Richard H.
Subject: Solomon v. Toyota
John,
Please let me know when we can expect the draft protective order that you said you would be sending us.
Thanks.
Ken
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intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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Disclosure: To ensure compliance with requirements imposed by the IRS in Circular 230, we inform you that any tax
advice contained in this communication (including any attachment that does not explicitly state otherwise) is not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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IRS Circular 230
Disclosure: To ensure compliance with requirements imposed by the IRS in Circular 230, we inform you that any tax
advice contained in this communication (including any attachment that does not explicitly state otherwise) is not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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