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Wi-LAN Inc. v. LG Electronics, Inc.

United States District Court, S.D. California

October 9, 2019

WI-LAN INC.; WI-LAN USA, INC.; and WI-LAN LABS, INC., Plaintiffs,
v.
LG ELECTRONICS, INC.; LG ELECTRONICS U.S.A., INC; and LG ELECTRONICS MOBILECOMM U.S.A., INC., Defendants.

          ORDER DENYING DEFENDANTS' MOTION FOR SANCTIONS [DOC. NO. 162.]

          MARILYN L. HUFF, DISTRICT JUDGE

         On September 13, 2019, Defendants LG Electronics, Inc., LG Electronics U.S.A., Inc., and LG Electronics Mobilecomm U.S.A., Inc. filed a motion for sanctions. (Doc. No. 162.) On October 1, 2019, Plaintiffs Wi-LAN Inc., Wi-LAN USA, Inc., and Wi-LAN Labs, Inc. filed a response in opposition to LG's motion for sanctions. (Doc. No. 197.) On October 1, 2019, the court took the matter under submission. (Doc. No. 200.) On October 8, 2019, LG filed its reply. (Doc. No. 225.) For the reasons below, the Court denies LG's motion for sanctions.

         Background

         On July 11, 2018, Wi-LAN filed a complaint for patent infringement against LG, alleging infringement of U.S. Patent Nos. 8, 787, 924, 8, 867, 351, 9, 226, 320, and 9, 497, 743. (Doc. No. 1.) Specifically, Wi-LAN alleges that LG's wireless communication products that are compliant with the 3rd Generation Partnership Project 4G LTE standard directly infringe the patents-in-suit. (Id. ¶¶ 37, 40, 53, 66, 79.)

         On October 10, 2018, LG filed an answer to Wi-LAN's complaint along with counterclaims for: (1) declaratory judgments of non-infringement and invalidity of the patents-in-suit; (2) declaratory judgment of unenforceability for failure to disclose to standard setting organizations; (3) declaratory judgment of unenforceability of the '351 patent; (4) declaratory judgment that LG is entitled to license the patents-in-suit on FRAND/RAND terms and conditions; (5) breach of contract; (6) monopolization and attempted monopolization in violation of section 2 of the Sherman Act; and (7) unfair business practices under California Business and Profession Code § 17200 et seq. (Doc. No. 17.) On April 12, 2019, the Court granted in part and denied in part Wi-LAN's motions to dismiss LG's counterclaims, and the Court dismissed LG's counterclaim for a declaratory judgment of unenforceability of the '351 patent due to infectious unenforceability with prejudice. (Doc. No. 79.)

         Mr. Sheldon Gilbert is one of the named inventors of the '924 patent and the '743 patent. See U.S. Patent No. 8, 787, 924 (filed Jul. 22, 2014); U.S. Patent No. 9, 497, 743 (filed Nov. 15, 2016). Mr. Gilbert is also one of the founders of Ensemble Communications Inc., the prior owner of the patents-in-suit. (Doc. No. 211, Ex. A at 14-15.) On May 10, 1999, Mr. Gilbert assigned all of his rights to the '518 application and all continuations thereof, which would include the '924 patent and the '743 patent, to Ensemble. (Doc. No. 162-2, Ex. 1.)

         On March 13, 2019, LG subpoenaed Mr. Gilbert to testify at a deposition in this action. (Doc. No. 162-5, Ex. 4.) Mr. Gilbert's deposition took place on August 29, 2019 in Palo Alto, California. (Doc. No. 211, Ex. A.) Mr. Gilbert attended the deposition unrepresented by counsel. (Id. at 47.) During, Mr. Gilbert's deposition, the follow exchanges occurred:

[THE WITNESS:] A. You know, I want to -- all right. I want to interrupt the deposition for a minute if I could. So Wi-LAN counsel mentioned something to me during a break that I may be accused of wrongdoing in this case; is that correct?
[MS. SAND FOR LG:] Q. All right. So you spoke with Wi-LAN's counsel during the break?
A. He spoke to me in the bathroom, yes

Q. And what did he say to you?

A. He said that I might be accused of fraud in this case.
MR. ENGER [FOR WI-LAN]: That's correct. LG has accused you of fraud in this case.
(Reporter clarification.)
MR. ENGER: LG has accused you of fraud in this case.
BY MS. SAND:
Q. Did he tell you anything more about this?
A. No.
Q. Did he give you any specifics about it?
A. No.
Q. What did you say in response to him?
A. “Thank you for letting me know.” Q. Okay.
A. Is that -- is that correct? Am I being accused of something in this case?
MS. SAND: Can we go off record for a bit?
MR. ENGER: Sure.
THE VIDEOGRAPHER: Going off record at 11:17 a.m.
(Off the record discussion.)
(Recess.)
(Off record: 11:17 a.m.)
(On record: 12:06 p.m.)
THE VIDEOGRAPHER: On record at 12:06 p.m.
BY MS. SAND:
Q. All right. Now, during our previous break, Wi-LAN's counsel talked to you during the break, I understand, and told you that ...

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