UNIVERSITY OF MINNESOTA, v. JURY TRIAL DEMANDED...ERICSSON, INC., Movant-Intervenor. Civil Action...

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

REGENTS OF THE UNIVERSITY OF MINNESOTA, Plaintiff, v. AT&T MOBILITY LLC, Defendant, ERICSSON, INC., Movant-Intervenor.

Civil Action No. 14-cv-4666 JRT-TNL JURY TRIAL DEMANDED

REGENTS OF THE UNIVERSITY OF MINNESOTA’S BRIEF IN OPPOSITION TO ERICSSON’S MOTION TO INTERVENE

Ericsson fails to establish that it is entitled to intervene either as a matter of right

under Rule 24(a) or permissively under Rule 24(b). The Eighth Circuit requires that

every proposed intervenor, whether mandatory or permissive, demonstrate Article III

standing to participate in the case. The indemnity request and damage to potential

customer relationships identified by Ericsson cannot establish standing. The Federal

Circuit recently held that an indemnification request alone is insufficient—an actual

agreement to indemnify is required. While Ericsson mentions AT&T’s indemnity request

several times, Ericsson does not allege (much less provide any evidence) that it has

accepted an obligation to indemnify. And Ericsson’s concern about commercial harm

CASE 0:14-cv-04666-JRT-TNL Document 80 Filed 01/28/16 of 14

ERIC-1043 Ericsson v. RUM

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that could come from damaged customer relationships falls well short of what is required

for standing. Ericsson’s motion must be denied on this ground alone.

Even if Ericsson could establish standing, it fails to satisfy the requirements for

intervention under Rule 24. First, Ericsson has not shown a recognized interest that

would be impaired by this litigation. Ericsson’s claim that its product sales would be

impaired by an infringement finding is the type of economic interest that the Eight Circuit

deems insufficient to warrant mandatory intervention. Likewise, the indemnification

request is a contingent interest that is too attenuated to justify intervention.

Ericsson’s intervention request is also deficient because its interests are adequately

represented by AT&T. Ericsson has not articulated any specific “disparate” interests

between it and AT&T (only speculative, unsubstantiated allegations), and its proposed

Answer advances the same primary defenses as AT&T. The fact that base stations

supplied by other manufacturers will also be implicated in this lawsuit actually supports

the denial of Ericsson’s motion. If AT&T can adequately represent the interests of these

other suppliers, then it can adequately represent Ericsson’s interests. Moreover, the

University’s patents implicate standards that should be uniformly applied through

AT&T’s network, regardless of supplier.

Ericsson’s intervention request would also cause undue delay and prejudice to the

adjudication of the University’s rights and therefore should not be permitted under Rule

24(b). Ericsson seeks to split this case in two—one case relating to its base stations and a

second for other base station suppliers (as well as other relevant components of AT&T’s

LTE network). Thus, allowing Ericsson to intervene would complicate the case and



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unnecessarily multiply the proceedings to the detriment of the University. It would also

open the door to similar requests from various other AT&T equipment suppliers. This

case, which is combined with actions against three other mobile carriers, is already

complex. Allowing any equipment supplier that can identify an economic interest (no

matter how attenuated) to intervene will not promote judicial efficiency. It will only

delay and distract from resolving the dispute between the University and AT&T.

Accordingly, the University respectfully requests that Ericsson’s request to

intervene be denied.

I. BACKGROUND

The University filed a complaint in November 2014 alleging that AT&T infringed

five of the University’s patents. The University later amended its complaint to add more

specificity regarding its infringement contentions. (See Amd. Compl. ¶¶ 28-30, ECF No.

25.) The amended complaint identified, among other things, the radio access portion of

AT&T’s LTE wireless networks. (Id.) Nevertheless, AT&T moved to dismiss the

University’s amended complaint because the University’s infringement claim allegedly

“involves numerous different technologies, provided and used by different entities,

including base station manufacturers, handset manufacturers, service providers, and end

users.” (AT&T Mot. to Dismiss at 1-2, ECF No. 32.) The Court ultimately concluded

that the University’s infringement allegations were sufficient. (Order on AT&T Mot. to

Dismiss at 7-14, ECF No. 45.)

Despite AT&T’s representations to the Court that it did not know what was

accused of infringement (representations that were repeated at the scheduling conference



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six weeks ago), AT&T had apparently already made an indemnification demand on

Ericsson. (See Ericsson Memo. Supporting Mot. to Intervene (“Br.”) at 2, ECF No. 69.)

An Ericsson representative even attended the Court’s scheduling conference presumably

based on the indemnification request. (Sched. Conf. Minute Entry, ECF No. 54.)

Although not required by the local rules, the University agreed to make a

preliminary infringement disclosure on December 18, 2015, that set forth asserted claims

and portions of the LTE specification implicated by the University’s current infringement

allegations. (McDaniel Decl. Ex. A, ECF No. 70.) The purpose of the disclosure was to

address AT&T’s representation that it did not understand what was accused of

infringement and to allow for meaningful, targeted discovery before the University’s

formal infringement contentions were due in April 2016.

Meanwhile, the University served targeted interrogatories that sought, among

other things, an identification of the equipment in AT&T’s LTE network that implements

three specific sections of the LTE standard, including the manufacturer’s name and the

equipment model number. AT&T did not provide a substantive response. Instead,

AT&T merely listed companies that provide base stations and software for its LTE

network (as opposed to the “numerous” different technologies alleged in its motion to

dismiss).1 The responses also generally invoked Rule 33(d), but no specific documents

were identified or produced.

1 Despite the lack of any substantive information, AT&T designated that portion of the response “Highly Confidential.” As a result, the University has not submitted AT&T’s interrogatory response to the Court with its opposition papers.



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II. ARGUMENT

A. Ericsson does not have Constitutional standing to intervene.

Ericsson cannot intervene in this case because it does not have standing. Before

addressing intervention under Rule 24(a) or 24(b), Ericsson must first establish Article III

standing to participate as a party. Mausolf v. Babbitt, 85 F.3d 1295, 1300-1301 (8th Cir.

1996) (stating that “an Article III case or controversy, once joined by intervenors who

lack standing, is—put bluntly—no longer an Article III case or controversy”). Ericsson

bears the burden of demonstrating that it has standing to intervene. Stenger v. Kellett,

No. 4:11CV2230, 2012 WL 1392292 at *2 (E.D. Mo. Apr. 23, 2012) (citing Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).

Ericsson contends that “AT&T has made an indemnity demand” based on a supply

contract. (Br. 3-4.) But even if Ericsson would have submitted evidence to establish this

fact, which it did not, the demand would not establish Constitutional standing. The

Federal Circuit recently held that a mere request for indemnification from a defendant’s

supplier does not create a case or controversy that gives rise to standing:

Instead, Appellees seek to broaden our precedent quite substantially by arguing that a customer request to indemnify ought to give rise to standing, without regard, it appears, to the merit of the customer request. This cannot be. Thus, we decline Appellees’ request to hold that their customers’ indemnification requests, which they concede are not valid, alone can create standing and thus a basis for jurisdiction over Appellees’ declaratory judgment actions in the Southern District of New York.

Microsoft Corp. v. DataTern, Inc., 755 F.3d 899, 904 (Fed. Cir. 2014). Ericsson never

represents, much less proves, that it has actually agreed to indemnify AT&T. For

example, Ericsson fails to submit the agreement that allegedly forms the basis for



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AT&T’s indemnification request, AT&T’s request, or more importantly, any evidence

that Ericsson acknowledges an obligation to indemnify AT&T. And without an actual

agreement to indemnify, Ericsson cannot show injury-in-fact or causation.2

Ericsson’s attempt to establish Constitutional standing because of “damage to its

relationship with customers” also fails. (See Br. 4.) An economic interest in clarifying a

customer’s rights under the asserted patents (without proof of an indemnity agreement)

cannot form the basis of an actual controversy required for Constitutional standing:

Nor has Microchip established a legal relationship between it and a customer that had a legal interest adverse to Chamberlain, such as the existence of an indemnity agreement between Microchip and its customer. At most, Microchip had only an economic interest in clarifying its customers’ rights under Chamberlain’s patents, which may have facilitated the sale of Microchip’s products. Microchip perhaps would economically have benefited if its customers had no fear of suit by Chamberlain. Such an economic interest alone, however, cannot form the basis of an “actual controversy” under the Declaratory Judgment Act.

MicroChip Tech. Inc. v. Chamberlain Group, Inc., 441 F.3d 936, 943 (Fed. Cir. 2006).

Ericsson’s failure to establish Constitutional standing dooms its intervention

request and precludes its participation in this action.

B. Ericsson has not shown a recognized interest that would be impaired by this litigation.

Even if Ericsson could establish Constitutional standing, Ericsson’s request to

intervene fails because it has not shown a recognized interest that would be impaired by

this litigation. Ericsson’s alleged interests are either unsupported or insufficient to meet

2 That AT&T demanded indemnification from Ericsson at the same time it proclaimed to the Court it could not understand the University’s infringement allegations only underscores the wisdom in discounting the significance of an indemnity demand.



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the requirements of Rule 24(a).

Rule 24(a) requires that the intervenor show (1) it has a recognized interest in the

subject matter of the litigation; (2) its interest might be impaired by the disposition of the

litigation; and (3) its interest will not be adequately protected by the existing parties.

Standard Heating & Air Conditioning v. City of Minneapolis, 137 F.3d 567, 570-571 (8th

Cir. 1998). “While Rule 24 promotes judicial economy by facilitating, where

constitutionally permissible, the participation of interested parties in others’ lawsuits, the

fact remains that a federal case is a limited affair, and not everyone with an opinion is

invited to attend.” Mausolf, 85 F.3d at 1301.

Ericsson attempts to create an “interest” by alleging that “Plaintiff is accusing

Ericsson base stations of infringing the patents-in-suit.” (Br. at 5.) But the University’s

infringement allegations refer specifically to AT&T’s 4G LTE Network and the radio

access portion of AT&T’s LTE wireless communication systems. (Amd. Compl. ¶¶ 28-

30, ECF No. 25.) The University has not accused Ericsson of infringement or singled out

its base stations. And while Ericsson’s moving papers included the University’s

Preliminary Disclosure of Asserted Claims and Infringement Allegations (which

describes the LTE standard specifications that provide the basis for the University’s

infringement allegations), Ericsson does not even attempt to link the functionality

described in the University’s disclosure with its base stations.3 Ericsson’s base stations

3 As noted previously, AT&T resisted the University’s attempt to gain this information through discovery. The University’s first round of interrogatories sought information relating to the identification and use of specific equipment in AT&T’s LTE network that



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may be part of AT&T’s LTE network, but AT&T’s own discovery responses show that

other hardware and software is included in the network as well. Even Ericsson does not

allege that its base stations are turn-key products that simply drop into AT&T’s LTE

network. The more customization that AT&T provides, the more limited the connection

between Ericsson and this lawsuit. See iWork Software, LLC v. Corp. Exp., Inc., No. 02-

C6355, 2003 WL 22494851 at *3 (N.D. Ill. Nov. 4, 2003) (“[D]efendants have

customized webMethods’ software independently of webMethods. . . . Consequently,

webMethods has only a limited connection to the infringement suit . . . .”)

Ericsson’s claim that sales of its products to customers would be impaired by an

adverse finding in this lawsuit is also not an interest that can support a request for

intervention under Rule 24. It is well established that Ericsson must show more than a

mere economic interest to satisfy the “interest” and “impairment” requirements for

intervention. Curry v. Regents of the Univ. of Minn., 167 F.3d 420, 422 (8th Cir. 1999);

see also Standard Heating, 137 F.3d at 571 (stating that the interest must be “direct,

substantial, and legally protectable”); Med. Liab. Mut. Ins. Co. v. Alan Curtis LLC, 485

F.3d 1006, 1008 (8th Cir. 2007) (“An economic interest in the outcome of the litigation is

not itself sufficient to warrant mandatory intervention.”).

Ericsson wrongly relies on Advanced Dynamic Interfaces to argue that its alleged

“interest” satisfies Rule 24(a). (Br. at 5-6.) For example, unlike the Eight Circuit, the

performs a narrow set of functions in the LTE standard. AT&T’s response identified base station and software manufacturers, but did not identify manufacturers of other components or describe how the equipment actually implements the specified functions.



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Third Circuit does not require that an intervenor establish Article III standing to

participate in the case. King v. Governor of the State of New Jersey, 767 F.3d 216, 245

(3d Cir. 2014). Also, unlike the Eight Circuit, the Third Circuit recognizes mere

economic interests under Rule 24 when it benefits judicial efficiency. See, e.g., Kleissler

v. U.S. Forest Serv., 157 F.3d 964, 970 (3d Cir. 1998) (“Phraseology such as “mere

economic interests,” for example, has been used but has not proved decisive in practice . .

. . We have more often relied on pragmatic considerations such as the benefits derived

from consolidation of disputes into one proceeding.”) In Advanced Dynamics Interfaces,

the court allowed intervention but then stayed the action because it would simplify issues

for trial and create “an efficient resolution of [the] dispute.” 2013 WL 6989428, at *1

n.2. Neither the law nor the facts in Advanced Dynamics Interfaces apply here.

Moreover, Ericsson’s concern that “if the Plaintiff prevails on its patent

infringement claims, Ericsson may be required to license the Plaintiff’s patents in order to

avoid future infringement” also fails to qualify as a recognized interest. (See Br. at 6.)

“An interest … that is contingent upon the occurrence of a sequence of events before it

becomes colorable, will not satisfy the rule.” Standard Heating, 137 F.3d at 571 (citing

Wash. Elec. v. Mass. Mun. Wholesale Elec., 922 F.2d 92, 97 (2d Cir.1990)).

Ericsson does not specifically argue that AT&T’s indemnification request

constitutes a legally-protected interest. But courts have found indemnification requests

too attenuated to justify intervention in any event. E.g., Restor–A–Dent Dental Labs.,

Inc. v. Certified Alloy Prods., 725 F.2d 871, 875 (2d Cir.1984) (finding the interest by the

potential intervenor insufficient because it is based on two contingencies—the Plaintiff



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prevailing at trial and then a finding that the potential intervenor is responsible for

indemnification); Nikon Corp. v. ASM Lithography B.V., 222 F.R.D. 647, 650 (N.D. Cal.

2004) (finding that although “there is no question that Zeiss has substantial business and

economic interests in this litigation … the Ninth Circuit has held that ‘[a]n economic

stake in the outcome of the litigation, even if significant, is not enough’ to qualify as a

protectable interest under Rule 24(a). This is no less true, in the Ninth Circuit, where an

unsubstantiated claim of indemnification is also made.”); DSMC, Inc. v Convera Corp.,

273 F. Supp. 2d 14, 25-26 (D.D.C. 2002) (finding the two contingencies of the defendant

losing the lawsuit and then succeeding in an indemnification claim against the intervenor

too attenuated to justify mandatory intervention).

C. AT&T is exceedingly capable of representing Ericsson’s interests.

Although there is a “minimal burden” of showing that existing parties will

inadequately represent the intervenor’s interests, Ericsson has not satisfied this

requirement of Rule 24(a).

The adequacy of representation is determined “by comparing the interests of the

proposed intervenor with the interests of the current parties to the action.” Sierra Club v.

Robertson, 960 F.2d 83, 86 (8th Cir. 1992). “More than a difference in motives must be

shown if the movant and an existing party have essentially the same interests in the

outcome of the litigation.” Curry, 167 F.3d at 786. Here, the interests of Ericsson and

AT&T are identical. Both have alleged invalidity and noninfringement as a counterclaim

and/or affirmative defense. (Compare ECF No. 46 with ECF No. 71.)



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Ericsson also fails to show that its own interests and that of AT&T are

“sufficiently disparate to support intervention.” (Br. at 7.) As an initial matter, Ericsson

never explains how AT&T’s alleged “broader defense” will differ as to base stations

supplied by Ericsson and those provided by other base station manufacturers. (See id.)

Quite the opposite, all of AT&T’s base stations should operate largely in the same way to

provide consistency across its network and comply with the LTE standard.

Unsubstantiated claims that Ericsson’s interests are not adequately represented by AT&T

are insufficient to meet this requirement of Rule 24(a). E.g., United Fire & Cas. Co. v.

Titan Contractors Serv., Inc., No. 4:10–CV–2076 CAS, 2012 WL 3065517, at *5 (E.D.

Mo. July 27, 2012) (finding that the proposed intervenors failed to meet their burden

because they “cite to little more than the ‘motivations for each party,’ although they do

not specify these motivations [or] … state any disagreement with the litigation strategy or

objectives of defendant”); Moore v. Verizon Communications Inc., No. C 09-1823, 2013

WL 450365, at *15 (N.D. Cal. Feb. 5, 2013) (finding the proposed intervenor’s

“speculative, unsubstantiated belief, without more, is insufficient to satisfy its burden to

demonstrate that its interests may not be adequately represented by the existing parties”).

The fact that AT&T will be representing the interests of its other base station

suppliers only demonstrates that AT&T is more than capable of representing whatever

interests Ericsson alleges it has in this case. Indeed, AT&T is a large, sophisticated

company that is represented by experienced counsel.

Ericsson’s arguments relating to its capability of presenting a defense, its

expertise, and its incentives also do not support intervention. (See Br. at 6-7.) For



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example, Ericsson need not intervene in the case to coordinate with AT&T regarding

defenses in this action. Indeed, Ericsson is clearly coordinating with AT&T already and

even sent a representative to the scheduling conference. AT&T operates some of the

most sophisticated communication networks in the world, and routinely deals in complex

matters. And given that Ericsson has not agreed to indemnify AT&T, it could be argued

that AT&T has an even greater incentive than Ericsson to prevail in this matter.

D. Ericsson cannot intervene under Rule 24(b).

Article III standing is a prerequisite for intervention whether mandatory under

Rule 24(a) or permissive under Rule 24(b). See Curry, 167 F.3d at 422-423 (stating that

Article III standing is a prerequisite for participation in a federal lawsuit and noting that

“[p]ermissive intervention similarly would be denied even if the Movants were found to

have standing”); Beau v. Moore, No. 405CV000903, 2005 WL 2807186, at *2 (E.D. Ark.

Oct. 26, 2005) (“The Eighth Circuit has held that Article III standing is a prerequisite for

intervention—whether of right or permissive—in a federal lawsuit.”). For the reasons set

forth previously, Ericsson has failed to establish Article III standing. As a result,

Ericsson’s request for permissive intervention must be denied.

But even if Ericsson could establish standing (and it cannot), allowing Ericsson to

intervene would cause undue delay and prejudice to the University. See Coffey v. C.I.R.,

663 F.3d 947, 951 (8th Cir. 2011) (identifying these two principal considerations). The

Court and the parties spent a considerable amount of time on a case schedule, which

needed to accommodate the parties here as well as in the three other cases that have been

consolidated with this action. If Ericsson’s intervention were to extend the existing



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deadlines and trial date, that would result in both undue delay and prejudice to the

University in the adjudication of its rights.

Additionally, if Ericsson intervenes, it apparently plans to fracture this case into

two pieces—one concerning the use of Ericsson base stations in AT&T’s LTE network,

and a second for the remaining “numerous” components in the network, including base

stations from other manufacturers. (See Br. at 7.) Ericsson’s approach will unnecessarily

complicate the case and multiply the proceedings to the detriment of the University.

Intervention will also open up the door to similar requests from various other AT&T

equipment suppliers that can allege an economic interest, no matter how attenuated.

Ericsson states that intervention will be “beneficial to the parties and the Court”

because it is “uniquely positioned” to provide expertise and information on its own

products. (Br. at 9.) But Ericsson need not intervene in this case to provide this

information. The third-party discovery process provides a suitable mechanism to obtain

the relevant documents and deposition testimony relating to its base stations.

This case is already very complicated, and adding more parties will complicate

matters further. AT&T is capable of presenting a defense that protects Ericsson’s alleged

interests in this case. Ericsson has not provided any compelling reason to intervene.



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Dated: January 28, 2016 FISH & RICHARDSON P.C.

By: s/ William R. Woodford William R. Woodford (#0322593)

[email protected] Conrad A. Gosen (#0395381) [email protected] 60 S. Sixth St. 3200 RBC Plaza Minneapolis, MN 55402 Tel: (612) 335-5070 Fax: (612) 288-9696

Of Counsel: Frank E. Scherkenbach [email protected] Lawrence K. Kolodney [email protected] One Marina Park Drive Boston, MA 02210-1878 Tel: (617) 542-5070 Fax: (617) 542-8906 Aamir A. Kazi [email protected] 1180 Peachtree Street NE Atlanta, GA 30309 Tel: (404) 892-5005 Fax: (404) 892-5002

and

WILLIAM P. DONOHUE General Counsel University of Minnesota

360 McNamara Alumni Center 200 Oak Street S.E. Minneapolis, MN 55455 Tel: (612) 624-4100 Fax: (612) 626-9624

Attorneys for Plaintiff Regents of the University of Minnesota



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UNIVERSITY OF MINNESOTA, v. JURY TRIAL DEMANDED...ERICSSON, INC., Movant-Intervenor. Civil Action...

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