`1
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`PELOTON INTERACTIVE, INC.
`Plaintiff,
`
`))
`
`))
`
`))
`
`v.
`ECHELON FITNESS, INC.,
`)
`Defendant.
`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
`PELOTON INTERACTIVE, INC.,
`Plaintiff,
`
`v.
`ICON HEALTH & FITNESS, INC.,
`Defendant.
`
`C.A. No. 19-1903-RGA
`
`C.A. No. 20-662-RGA
`
`))
`
`))
`
`))
`
`))
`
`) T
`
`uesday, August 25, 2020
`3:31 p.m.
`Scheduling Teleconference
`
`BEFORE: THE HONORABLE RICHARD G. ANDREWS, U.S.D.C.J.
`APPEARANCES:
`
`MORRIS NICHOLS ARSHT & TUNNELL LLP
`BY: MICHAEL FLYNN, ESQUIRE
`BY: ANDREW M. MOSHOS, ESQUIRE
`-and-
`HUESTON HENNIGAN
`BY: STEVEN N. FELDMAN, ESQUIRE
`BY: JOSEPH W. CRUSHAM, ESQUIRE
`For the Plaintiff
`
`
`
`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 2 of 17 PageID #: 700
`2
`
`APPEARANCES CONTINUED:
`GREENBERG TRAURIG LLP
`BY: BENJAMIN J. SCHLADWEILER, ESQUIRE
`BY: DAVID JAY, ESQUIRE
`BY: DOUGLAS R. WEIDER, ESQUIRE
`BY: JAMES L. RYERSON, ESQUIRE
`For the Defendant
`Echelon Fitness, Inc.
`
`RICHARDS, LAYTON & FINGER, P.A.
`BY: FREDERICK L. COTTRELL, III, ESQUIRE
`-and-
`MASCHOFF BRENNAN
`BY: TYSON HOTTINGER, ESQUIRE
`BY: DAVID R. WRIGHT, ESQUIRE
`For the Defendant
`ICON Health & Fitness
`
`*** PROCEEDINGS ***
`
`THE COURT: Good afternoon. This is Judge
`Andrews in Peloton versus Echelon, Civil Action Number
`19-1903, and Peloton versus ICON, Civil Action Number
`20-662.
`
`Is my deputy clerk on the line?
`DEPUTY CLERK: I'm here, Judge.
`THE COURT: Okay. And is my court reporter on
`
`the line?
`
`THE REPORTER: Yes, Judge.
`THE COURT: All right. And so for Peloton,
`Mr. Flynn, are you on the line?
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 3 of 17 PageID #: 701
`3
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`MR. FLYNN: I am, Your Honor, and I have Andrew
`Moshos from Morris Nichols with me, and Steven Feldman, and
`Joseph Crusham from Hueston Hennigan for Peloton.
`THE COURT: Okay. And for defendant, Echelon,
`who's on the line?
`MR. SCHLADWEILER: Good afternoon, Your Honor.
`This is Ben Schladweiler from Greenberg Traurig on behalf of
`Echelon. I'm joined today by Doug Weider, David Jay, and
`James Ryerson all from the Greenberg Traurig office.
`THE COURT: All right. And for defendant, ICON?
`MR. COTTRELL: Good afternoon, Your Honor, Fred
`Cottrell from Richards Layton, and my co-counsel on with me
`from Maschoff Brennan, David Wright and Tyson Hottinger.
`THE COURT: All right. So thank you. So I read
`the two letters, one from the plaintiff and one jointly from
`the defendants talking about the schedule, et cetera. And I
`also looked at the proposed scheduling orders, and I looked
`in the ICON case. I think it's Docket Item 21-3 which is
`kind of the chart saying what everybody wanted.
`And so here's what I think based on reading all
`of that: I'm not going to consolidate the cases other than
`to say that the claim construction hearing, the date that I
`give will be for the Peloton patents, and it will involve
`both defendants. And so that means that there should also
`be joint briefing on the Peloton patents.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 4 of 17 PageID #: 702
`4
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`And so basically the things that I needed to
`decide that I could see from all of this was this: You need
`a trial date, and as I'm sure the Delaware lawyers know, we
`have a lot of cases. So I'm not going to give out multiple
`trial dates. I'm going to give out one trial date, and
`that's October 17th of 2022.
`You know, it seems to me like a lot of things
`could happen before we ever get to the trial date. And if
`it turns out that Peloton's case against Echelon is ready or
`Peloton's case against ICON is ready, or the ICON case
`against Peloton is ready, we've got three different cases
`that could be, you know, ready then. And if it turns out
`that everybody's ready, I'll pick somebody to go much later
`on. But it seems that it just occupies my calendar for no
`particular point giving out multiple dates.
`So the pretrial conference will be scheduled for
`September 30th of 2022 at 9:00 a.m. And the dispositive
`motions date is May 31st of 2022. The claim construction
`hearing on the Peloton patent will be June 24th of 2021 at
`9:00 a.m. And the claim construction hearing on the ICON
`patents will be June 25th at 9:00 a.m.
`And so there will be a separate briefing on the
`Peloton patents which everybody will participate in and on
`the ICON patents which presumably will only be Peloton and
`ICON.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 5 of 17 PageID #: 703
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`There was a dispute about the inequitable
`conduct amendment, and on that I'm going to go with the
`defendants' proposal. The briefing, for some reason it
`wasn't entirely clear to me. This is the claim construction
`briefing. Peloton had 7,500 words for the reply brief, but
`I'm going to go with my standard 5,000 words.
`And as far as I can see, that was the disputed
`issues you all had. I may have missed something in which
`case I'm certainly willing to hear what I missed and resolve
`that, too. Basically, you know, there should be a separate
`scheduling order for the Echelon case and one for the ICON
`case.
`
`And so I think that's all. And so to the extent
`there are intermediate dates in between, you know, the dates
`that I've just given you, I would expect that you could work
`them out between you amongst yourselves.
`So is there anything that is in dispute that I
`have overlooked?
`MR. FELDMAN: Your Honor, thank you. This is
`Steve Feldman of Hueston Hennigan on behalf of Peloton.
`Thank you. We appreciate your time and energy for reading
`these two letters and appreciate that you agree that the
`cases shouldn't be consolidated and will have separate
`schedules.
`
`The one thing I just wanted to clarify on which
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 6 of 17 PageID #: 704
`6
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`I'm just not sure of was that you talked about it being
`separate case schedules as we talked about except for the,
`you know, Peloton patents themselves for claim construction
`which you put on a specific date. But then you mentioned a
`dispositive motion date of May 31, 2022, which I didn't
`totally understand because the way that we have proposed
`these cases to be separate, which I believe you said you
`agreed with, would stagger the dates for summary judgment
`motions, and expert reports, and the like, so they were not
`all on top of each other.
`THE COURT: Yeah, so I'm not going to do that.
`You know, so that's the reason why I gave one dispositive
`motion date. It will be the same for both cases.
`Oh, and that does remind me of something else I
`saw which I forgot to mention. There was a footnote or
`something arguing about the length of the briefing in
`connection with summary judgment. And the one side saying,
`well, let's keep that open. The other side saying, no, 40,
`40, 20. I'd like to go with 40, 40, 20.
`If there's a good reason when we get to the time
`to either be shrinking it or increasing it, you know, I'll
`hear you then. But I'd rather have something in place, kind
`of a default, if you will, then just leaving it up in the
`air because part of having a default is, you know, you have
`to come up with a pretty good reason to want more pages.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 7 of 17 PageID #: 705
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`All right. So thank you, Mr. Feldman.
`Anybody else?
`MR. FELDMAN: Sorry, Judge Andrews. Can I just
`ask one more followup on that to make sure I understand?
`THE COURT: Yeah, sure.
`MR. FELDMAN: And sorry, this may be my own
`confusion. I thought when you described the cases wouldn't
`be consolidated, that would mean that you were agreeing that
`there would be separate dates. So we had proposed separate
`dates to when expert reports are due, and rebuttal expert
`reports are due, and Daubert motions are due given that, as
`we described, there are a number of very different issues in
`the cases. And throwing them all at the exact same time
`would be, we thought, illogical and also just incredibly
`burdensome.
`
`And I thought when you said you were not -- you
`were agreeing that these cases consolidation would have
`separate schedules, that's what you were agreeing with. But
`now I just want to make sure I understand because then you
`just said you were just going to have one summary judgment
`deadline.
`
`Does that mean -- so maybe you could just
`explain what will be or won't be separate.
`THE COURT: Sure. So the separate is you're
`running in parallel, but on the same time frame.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 8 of 17 PageID #: 706
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`MR. FELDMAN: Okay. So that which was
`essentially defendants' -- largely defendants' proposal; is
`that correct? The cases are essentially due at the same
`time frame?
`
`THE COURT: Yes.
`MR. FELDMAN: Okay. So in terms of no
`consolidation, in what form will there be no consolidation?
`THE COURT: Well, for example, in Peloton versus
`Echelon, when you file your summary judgment motions, it
`will be for the Peloton versus Echelon case. At the same
`time, the Peloton versus ICON case people will file summary
`judgment motions for that case.
`MR. FELDMAN: I understand. Okay.
`One last question then, Your Honor. I think I
`do understand where you're coming out on that. You know,
`obviously, one of the things we raised is that, you know,
`given that -- if we're going to have a case where the
`schedules are completely aligned as the defendants proposed,
`when the basis for that is essentially as they have
`described the cases are from their perspective incredibly
`related. One of the issues we raised which I just did want
`to address because I do think it's important is at this
`point it would seem to be inefficient and also, I think,
`unfair and prejudicial to Peloton for basically these to be
`two -- these cases to be put on the exact same track while
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 9 of 17 PageID #: 707
`9
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`the others -- while the defendants are each permitted to do
`just as much discovery as if the cases were just entirely
`separate cases.
`So I think we're looking at from what the
`defendants' proposal of hundreds of hours of depositions
`where they can take the same witnesses, they can have --
`they each have just as many interrogatories as they would
`ever have, just as many reports, just as many, you know,
`summary judgment motions which raises a big burden.
`My concern really about -- there's the
`efficiency thing that I just -- letting them have basically
`twice as much when they think the cases are so related, I
`would just suggest that there might be a way to narrow that
`or force that to be narrowed a bit. And also, my concern
`with the schedule if these things are going to be on
`essentially the track the defendants proposed, that it
`really, from our perspective, doesn't leave very much --
`enough space given that now we're, I think, talking about an
`October trial date for one of them, just by way of example.
`On the schedule that I believe Your Honor is
`essentially adopting, on January 14th, 2022, expert reports
`would be served by all sides meaning at that exact same
`date. We, Peloton, would be serving reports on the ICON
`patents' validity and infringement issues. We would be
`serving expert reports and survey material on our trademark
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 10 of 17 PageID #: 708
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`infringement, trademark dilution, trade dress claims against
`Echelon. We would be serving expert reports on their false
`advertising claims against us from Echelon. And they would
`each be serving numerous expert reports on their own issues
`in the case. And then all of a sudden, we've got a fast
`track of about three or four weeks to do rebuttal reports,
`and then reply reports on all of these different expert
`reports, many of which that have absolutely nothing to do
`with one another, fast forward through, you know, a very
`short amount of expert depositions where all these different
`experts and all these different issues that really don't
`relate to each other in the case have to be done.
`And so my concern is I think it just creates a
`huge burden on Peloton, and I'm not sure what
`efficiencies -- I don't think it creates any efficiency
`which is why, from our perspective, at least deciding that
`one case is going first and having that be a bit staggered
`doesn't hurt anyone. By agreeing that the Peloton patents
`will all be heard at one Markman and one claim construction
`hearing, which we proposed and Your Honor agreed with, it
`seems to allow for an appropriate amount of efficiencies.
`But the rest of this just seems like it will create a huge
`burden without any upside, allowing just a tremendous amount
`of discovery and everything to be crammed into one small
`time frame.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 11 of 17 PageID #: 709
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`THE COURT: So two things. One of which is, in
`my experience, people don't take unnecessary discovery just
`because they can. So the fact that it's two cases, and they
`do have, as I think you point out, lots of different issues,
`you know, there's going to be a lot of discovery.
`And in terms of creating efficiencies, I'm
`basically trying to create efficiencies in the framework in
`which I operate which is to get these two cases or get all
`of this to be ready in roughly the same time. And you know,
`you're talking about a year and a half from now. If you
`need more people to work on the different parts of the case,
`you can get more people.
`MR. FELDMAN: Okay. All right. Thank you, Your
`Honor. Understood.
`MR. SCHLADWEILER: Your Honor, this is --
`THE COURT: All right, anything from --
`MR. SCHLADWEILER: Yes, Your Honor. This is Ben
`Schladweiler, and I just want to -- I just have a couple
`questions, so I'll be quick.
`THE COURT: Sure.
`MR. SCHLADWEILER: On the summary judgment page
`limit, I understand you said that we could put in 40, 40,
`20. One of the things that we suggested that I would
`suggest us putting in there is we had a date for a joint
`status report sometime around the end of fact discovery, and
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 12 of 17 PageID #: 710
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`that way what we can do, you know, is if we do think that
`those limits won't work, we could at least put that in
`writing and present it to the Court that -- because that's a
`date that we already sort of proposed. So that's one thing
`that I was wondering if we could add to the schedule.
`THE COURT: Sure.
`MR. SCHLADWEILER: Great. And then the other
`thing is I just want to make sure we're understanding the
`deposition proposal because there are differences in the two
`parties' deposition proposals. And that seems to be --
`maybe it's still an outstanding dispute. What we proposed,
`we were going to coordinate these cases so that we would --
`you know, I think we had 70 hours for basically party
`discovery per person or per side and then, you know, there
`was some discovery -- third party would be separate from
`that.
`
`And then the other thing that we proposed was we
`were trying to actually make -- we were trying to alleviate
`the burden or plaintiff's alleged burden on some of this
`stuff by, you know, coordinating the depositions in these
`cases such that we would -- you know, if we're deposing one
`of their witnesses, we would be limited to seven hours
`unless we could show some good cause. And good cause could
`be shown, for instance, if seven hours doesn't work down the
`road, or they designate somebody on a bunch of 30(b)(6)
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 13 of 17 PageID #: 711
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`topics, so we may need more time on that person, whatever it
`is.
`
`But I just want to make -- I just want to
`understand if the Court ruled on the deposition part of this
`as well.
`
`THE COURT: You know, after you say that,
`Mr. Schladweiler, I'm not sure what it is you want me to
`rule on exactly. Can you crystalize whatever it is that my
`options A and B are that you want me to pick one?
`MR. SCHLADWEILER: I think what their option
`was, their option being plaintiff's option and that, again,
`was when these cases were staggered, and maybe we just have
`to, you know, talk to them after, you know, your rulings
`today, and that might be the case. But I believe what their
`position is that each party would have, you know, 70 hours
`in each case, and that would include everything.
`As where what we were proposing would be
`70 hours, but it would exclude third-party depositions. And
`we would also -- we actually put some more proposals in
`there about, you know, making our hours concrete by saying
`that Mr. Foley, who is their CEO and he is the named
`inventor on the patents, he's involved in basically every
`claim that you could imagine in this case. We would get
`14 hours, and we would coordinate that with ICON.
`And that for all the other witnesses, generally
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 14 of 17 PageID #: 712
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`we would get seven hours as a matter of right, but then we
`could request more if good cause shows it later on.
`THE COURT: Yeah. Well, so generally speaking,
`I'm not much for getting more than seven hours. It's hard
`to imagine good cause can justify that.
`So to the extent there's an issue: Does the
`70 hours include third-party depositions or not, I would say
`they should.
`
`To the extent the question is: Should the
`70 hours include expert depositions, I would say they do
`not.
`
`And you know, just because I've said they're
`separate schedules, that doesn't prevent people, if they
`think it's in their interest to doing things jointly. You
`know, but that's something you all would be in a better
`position to work out as you go along.
`And as far as the CEO goes, who I do understand
`wears a lot of different hats and is an inventor, you know,
`I think there might be reasons why you need more than seven
`hours with him. But you know, I prefer to just start off
`with you get seven hours. Then if down the road it seems
`clear that that's not enough, then maybe because he's an
`inventor and because he, I don't know what other -- because
`of whatever else is --
`MR. SCHLADWEILER: I didn't mean to interrupt,
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 15 of 17 PageID #: 713
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`Your Honor.
`
`THE COURT: No, that's all right. You know, I
`think there's a slight delay, so it seems like I've stopped
`talking and then we're both talking at the same time.
`That's all right. That's part of the reason why I'm not a
`big fan of doing these things by telephone.
`But I'm sorry, Mr. Schladweiler, you were going
`
`to say?
`
`MR. SCHLADWEILER: No, I think he does wear many
`hats. We can obviously present that case later on, and I'm
`fine with that. You know, I just wanted to raise that. So
`we can, you know, work with plaintiff on working out the
`deposition provision, I think, based on what Your Honor
`said. I do think that we probably need more than seven
`hours for Mr. Foley, but we can address that later.
`THE COURT: Yeah.
`MR. FELDMAN: Your Honor --
`MR. SCHLADWEILER: Oh, go ahead.
`THE COURT: I'm sorry. Is that Mr. Feldman?
`MR. FELDMAN: Yes, but please go ahead. I
`didn't want to interrupt you.
`THE COURT: No, no, no. You go ahead. You were
`eager to say something. Go ahead and say it.
`MR. FELDMAN: No. All I was going to say is I
`think I see where Your Honor is coming from on all of this,
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 16 of 17 PageID #: 714
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`and my suggestion would be that perhaps now that we know
`where you're coming down on this, that perhaps me, and
`Mr. Flynn, and Ben, and whomever from ICON can sit down and
`try to come up with a finalized sort of joint proposed
`schedule taking into account with the way you've come down
`rather than you sort of placing sort of something into --
`just putting something into place right now. Maybe try to
`submit in the next three to five days.
`THE COURT: No. I think, Mr. Feldman, that's a
`good idea. I mean, it is -- you know, I think that's a good
`idea because to the extent you have a little bit that you
`can't work out, you know, if they're in one proposed order,
`you know, submit the alternatives, and I will cross one or
`the other out.
`You know, it's much harder to schedule orders
`when you're kind of painting on a canvas that has lots of --
`you can't see what the choices are. So why don't you do
`that, try to work with what I've given you.
`MR. FELDMAN: Great.
`THE COURT: And from ICON, does anybody have
`something they want to say?
`MR. WRIGHT: No, Your Honor. Thank you.
`THE COURT: Okay. All right. So why don't you
`see if you can get something in in a few days, and I will
`sign it if it's all agreed to or resolve it if it's not.
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`Case 1:20-cv-00662-RGA Document 29 Filed 09/01/20 Page 17 of 17 PageID #: 715
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`Okay?
`
`(Everyone said, Thank you, Your Honor.)
`THE COURT: All right. Have a good afternoon.
`I'm hanging up.
`(Scheduling teleconference was concluded at 3:56
`
`p.m.)
`
`I hereby certify the foregoing is a true and
`accurate transcript from my stenographic notes in the
`proceeding.
`/s/ Heather M. Triozzi
`Certified Merit and Real-Time Reporter
`U.S. District Court
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