Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 1 of 13
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`Plaintiff,
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`v.
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`LAMBETH MAGNETIC STRUCTURES, )
`LLC,
`)
`)
`)
`)
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`)
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`)
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`SEAGATE TECHNOLOGY (US)
`HOLDINGS, INC., et al.,
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`Defendants.
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`Plaintiff,
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`v.
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`
`
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`
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`LAMBETH MAGNETIC STRUCTURES, )
`LLC,
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
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`WESTERN DIGITIAL CORPORATION,
`et al.,
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`Defendants.
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`Civil Action No. 16-538
`
`Judge Cathy Bissoon
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`Civil Action No. 16-541
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`Judge Cathy Bissoon
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`MEMORANDUM ORDER
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`For the reasons stated below, Defendants’ Motions to Compel Documents Withheld as
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`Privileged by Plaintiff (Civil Action No. 16-538, Doc. 87; Civil Action No. 16-541, Doc. 98)
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`will be DENIED.
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`This Order concerns discovery in two consolidated patent infringement cases in which
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`Plaintiff Lambeth Magnetic Structures, LLC (“LMS”) alleges, in civil action numbers 16-538
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`and 16-541 respectively, that Seagate Technology (US) Holdings and Seagate Technology, LLC
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`(collectively, the “Seagate Defendants” or “Seagate”); and Western Digital Corporation, Western
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 2 of 13
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`Digital Technologies, Inc., Western Digital (Fremont), LLC, Western Digital (Thailand)
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`Company Limited, Western Digital (Malaysia) SDN.BHD and HGST, Inc. (collectively the
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`“Western Digital Defendants” or “Western Digital”) infringe Plaintiff’s patent, United States
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`Patent No. 7,128,988 (the “‘988 patent”).
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`On November 14, 2017, after receiving the parties’ Position Statements and Responses
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`regarding the instant discovery dispute, the Court ordered briefing on Defendants’ requested
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`access to documents withheld as privileged by Plaintiff (Civil Action No. 16-538, Doc. 82; Civil
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`Action No. 16-541, Doc. 91). Pursuant to that Order, Defendants timely filed their respective
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`Motions to Compel with supportive briefing (Civil Action No. 16-538, Docs. 87-89; Civil Action
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`No. 16-541, Docs. 98-101). Plaintiff timely opposed (Civil Action No. 16-538, Docs. 95-96;
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`Civil Action No. 16-541, Docs. 107-108). Defendants’ Motions to Compel are now ripe for this
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`Court’s consideration.
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`Summary
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`Defendants seek access to three categories1 of documents: (1) Dr. David N. Lambeth’s
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`(“Lambeth’s”) communications with his academic colleagues concerning reverse engineering of
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`Defendants’ products, (2) LMS’s communications with
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`, a company hired to
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`perform reverse engineering tests for the purpose of establishing Lambeth’s patent infringement
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`1 The Seagate and Western Digital Defendants categorize these documents slightly differently,
`with Seagate using four categories rather than three. (Compare Seagate’s Brief in Support of
`Motion to Compel, hereafter “Seagate’s Brief,” Civil Action No. 16-538, Doc. 89, with Western
`Digital’s Brief in Support of Motion to Compel, hereafter, “Western Digital’s Brief,” Civil
`Action No. 16-541, Doc. 101-2.) The specific documents to which Defendants seek access are
`listed, respectively, in the first exhibit to each supporting brief. (Seagate’s Brief at Ex. 1;
`Western Digital’s Brief at Ex. 1). The documents sought by Seagate and Western Digital largely
`overlap, but the lists are not identical. Further, Western Digital seeks production of 613 listed
`documents, while Seagate seeks production of its enumerated documents as well as “all
`communications relating to” negotiation of Plaintiff’s litigation finance agreement. These
`differences have no effect on the Court’s analysis.
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`

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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 3 of 13
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`case, and (3) LMS’s communications with litigation-funding organizations, including LMS’s
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`agreement with one of those organizations. For each category of documents, Plaintiff has
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`withheld production on the grounds that the documents are subject to attorney-client privilege,
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`the work product privilege or both. Plaintiff contends that these documents were prepared for
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`litigation concerning the ‘988 patent or were prepared pursuant to communications with
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`attorneys. As to Plaintiff’s communications with his colleagues on reverse engineering,
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`Defendants counter that many of these documents are communications between non-attorneys
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`and they were not prepared in anticipation of litigation. As to the
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` testing
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`documents, they argue that Plaintiff has waived any claim to privilege by citing them in
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`Plaintiff’s infringement contentions and selectively relying on them to show infringement. And,
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`Defendants argue that Plaintiff’s communications with litigation funding companies are not
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`privileged due to the lack of a common legal interest between Plaintiff and these firms.
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`Upon consideration of the parties’ arguments, and for the reasons stated below, the Court
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`finds that the materials sought are privileged under the work product doctrine. Because the
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`Court finds that the work product doctrine shields these documents from discovery, it need not
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`address the parties’ arguments concerning the availability of attorney-client privilege.
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`Legal Standard
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`“It is well recognized that the federal rules allow broad and liberal discovery.” Pacitti v.
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`Macy’s, 193 F.3d 766, 777 (3d Cir. 1999). Under Rule 26(b)(1) of the Federal Rules of Civil
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`Procedure, the scope of discovery includes “any nonprivileged matter that is relevant to any
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`party’s claim or defense.” Fed. R. Civ. Pro. 26(b)(1). A qualified privilege exists, however, for
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`“documents and tangible things that are prepared in anticipation of litigation or for trial by and
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`for another party or its representative (including the other party’s attorney, consultant, surety,
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`indemnitor, insurer, or agent).” Id. at 26(b)(3)(A). Under this Rule, the privilege applies when
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`“in light of the nature of the document and the factual situation in the particular case, the
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`document can fairly be said to have been prepared or obtained because of the prospect of
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`litigation.” Martin v. Bally’s Park Place Hotel & Casino, 983 F.2d 1252, 1264 (3d Cir. 1993)
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`(internal citation omitted). In evaluating the facts of the situation, the Court must look “to the
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`state of mind of the party preparing the document or . . . the party ordering preparation of the
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`document” and assess whether the party has an “objectively reasonable” belief that litigation is
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`forthcoming. Id. at 1260. The objective test for the reasonableness of the party’s belief has two
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`requirements: “the documents were prepared (1) at a time when litigation was reasonably
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`foreseeable; and (2) primarily for the purpose of litigation.” Kimberly-Clark Worldwide, Inc. v.
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`First Quality Baby Prods., 2010 WL 4537002, at *2 (M.D. Pa. Nov. 3, 2010) (citing United
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`States v. Rockwell Int’l, 897 F.2d 1255, 1266 (3d Cir. 1990)).
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`If the work product privilege is established for particular documents, the party seeking
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`discovery can overcome the privilege by showing “that it has a substantial need for the materials
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`to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by
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`other means.” Fed. R. Civ. Pro. 26(b)(3)(A)(ii). In addition, the party seeking discovery can
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`overcome the privilege by showing that it has been waived. E.g., Westinghouse Elec. Corp. v.
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`Republic of the Philippines, 951 F.2d 1414, 1429 (3d Cir. 1991) (a party may waive this
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`protection through disclosure of documents to an adversary).
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`Plaintiff, as the party asserting the work product privilege, bears the burden of proof.
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`Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 138 (3d Cir. 2000).
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`Accordingly, the Court begins with Plaintiff’s evidence.
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 5 of 13
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`Plaintiff’s evidence supporting its assertion of privilege
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`Under seal, Plaintiff has submitted two declarations in support of his work product
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`assertions as well as two consulting agreements with his academic colleagues.2 The Court has
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`examined these exhibits with particular attention to whether they show that the documents
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`sought by Defendants were prepared at a time when litigation was reasonably foreseeable and
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`were prepared primarily for litigation purposes.
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`Lambeth’s declaration states, under penalty of perjury, that he first decided to investigate
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`whether Defendants’ products were infringing his ‘988 patent, the subject of the instant
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`litigation, in 2008. In October 2008, to obtain assistance in pursuit of this investigation (in the
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`form of product testing and reverse engineering), Lambeth contacted
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` and
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`,
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` with relevant expertise. By
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`early 2009, Lambeth began reaching out to attorneys to seek representation to enforce his patent.
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`The law firms he contacted included
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`. Following these law firm contacts, Lambeth formally engaged
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` and
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` as consultants on June 10, 2009, as is evident from the consulting agreements attached
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`to Plaintiff’s Opposition Briefs. The consulting agreements each state
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` (Exs. 3-4 to Opposition
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`to Seagate; Exs. 3-4 to Opposition to Western Digital.) Under advice from counsel at
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`, and in consultation with
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`, Lambeth directed reverse engineering work
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`2 Unless otherwise cited, the facts pertaining to Plaintiff’s assertions of privilege are contained in
`the sealed exhibits to Plaintiff’s Opposition to Seagate’s Motion to Compel (Civil Action No. 16-
`583, Doc. 96) and Plaintiff’s Opposition to Western Digital’s Motion to Compel (Civil Action
`No. 16-541, Doc. 108). These sealed exhibits are, respectively, Lambeth’s Affidavit, Jimmy
`Goo’s Affidavit, Lambeth’s consulting agreement with
`, and Lambeth’s consulting
`agreement with
`.
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 6 of 13
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`on potentially infringing products from 2009 to 2010. At the same time, Lambeth had extensive
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`conversations with counsel at
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` about enforcing the ‘988 patent against Defendants
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`and others, although these conversations did not culminate in a formal engagement. In the fall of
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`2010, Lambeth contacted other attorneys and law firms about representation, enforcement of the
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`‘988 patent and its foreign counterparts, and other possible transactions involving the patent,
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`such as a transfer of patent rights to facilitate litigation. These discussions included
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`communications with
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`. Lambeth
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`then sold the ‘988 patent and related patents to an Acacia entity in December 2010, pursuant to
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`an agreement that allowed Lambeth to reacquire the patents under certain conditions. This
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`agreement, in turn, ultimately led to litigation and Lambeth’s reacquisition of the patents in mid-
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`2013. During the period in which Lambeth no longer owned the ‘988 patent, he engaged in
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`discussions with
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` about Lambeth’s dispute with Acacia and his potential
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`reacquisition and assertion of the ‘988 patent.
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`Once Plaintiff regained the ‘988 patent, he again sought legal advice from
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` on
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`enforcement.
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`Documents sought in Defendants’ Motions to Compel
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`1. Lambeth’s communications with his academic colleagues,
`reverse engineering of Defendants’ products
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`, concerning
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`Defendants seek Lambeth’s communications with
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` from October 13,
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`2008, through March 26, 2014, which are labeled in Plaintiff’s privilege log as concerning
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` or
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 7 of 13
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` (See Ex. 1 to Western Digital’s
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`Brief; Ex. 1 to Seagate’s Brief.) Defendants argue that these documents, some of which precede
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`the instant litigation by seven years, cannot have been prepared at a time when litigation was
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`reasonably foreseeable and therefore cannot be subject to the work product privilege.3
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`(Seagate’s Brief, p. 6; Western Digital’s Brief, p. 5.) Supporting this argument, Defendants cite
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`Montgomery County v. MicroVote Corp., 175 F.3d 296, 305 (3d Cir. 1999) (Greenberg, J.,
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`concurring), which answers the question “[h]ow remote a prospect can the litigation be for the
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`anticipation to be ‘reasonable’?” by stating that “[a] party must show that there existed an
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`identifiable specific claim or impending litigation when the materials were prepared” (internal
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`quotation marks omitted).
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`3 As to two documents, Seagate argues that LMS lacks standing to claim work product privilege
`during the period from December 8, 2010 to July 27, 2013, because an Acacia entity rather than
`Lambeth owned the ‘988 patent during this period. (Seagate’s Brief, p. 5.) Seagate grounds this
`argument on RLS Associates, LLC v. United Bank of Kuwait, PLC, 2003 WL 1563330, at *5
`(S.D.N.Y. Mar. 26, 2003), which found that several documents were not subject to work product
`immunity because they were not prepared “by or on behalf of [Defendant].” It is true that LMS,
`not Lambeth or Acacia, is the Plaintiff in the instant cases. In the Third Circuit, standing to
`assert work-product immunity generally extends to nonparties when: the document would
`otherwise be privileged if the nonparty were a party; there is an alignment of interest between the
`nonparty and the party; there is a nexus with the instant litigation; and the circumstances
`implicate the purposes of the privilege—preventing discovery from chilling the parties’ ability to
`prepare their cases, preventing free-loading off adversaries, and preventing disruption of ongoing
`litigation. See Serrano v. Chesapeake Appalachia, LLC, 298 F.R.D. 271, 276-280 (W.D. Pa.
`2014); Patel v. Kensol-Franklin, Inc., 2016 WL 1109874, at *2 (M.D. Pa. Mar. 22, 2016). Here,
`the documents fall within this extension to nonparties. Lambeth is the majority shareholder and
`founder of Plaintiff, LMS and he maintained a contractual interest in the patent during Acacia’s
`ownership. Lambeth has always retained custody of the materials for which he seeks protection.
`As explained below, he communicated with
` about reverse engineering products in
`anticipation of the instant litigation. Lambeth would thus be entitled to assert the privilege if he
`were a party. Additionally, Lambeth’s interests aligned with LMS’s during the relevant period;
`Lambeth’s actions led to the instant litigation and he is a participant in the litigation; and
`granting access to reverse engineering communications would tend to chill future efforts to
`conduct similar research in anticipation of litigation.
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 8 of 13
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`The Court finds, however, based on Lambeth’s declarations, that Lambeth has established
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`an objectively reasonable belief that litigation to enforce the ‘988 patent was forthcoming as of
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`his initial consultations in October 2008. In other words, an enforcement action for the ‘988
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`patent constituted an “identifiable . . . impending litigation,” id., and Lambeth reasonably
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`foresaw this action at the time he undertook testing of possibly infringing products. Cf. In re
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`Gabapentin Patent Litigation, 214 F.R.D. 178, 184-186 (D.N.J. 2003) (finding that materials
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`prepared in connection with the patent application process—before the patent issues—may
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`qualify for work product protection if “litigation (in the form of a patent infringement action) is
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`almost certain to follow” based on objective circumstances).
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`The entire basis for Lambeth’s reverse engineering communications with
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`, which began in 2008, was to prepare for litigation by determining which products
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`contained technologies potentially infringing the ‘988 patent. As Plaintiff states,
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` (Opposition to Seagate, p. 5; Opposition to Western Digital, p. 5.)
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`Lambeth’s continuous communications concerning patent enforcement show a somewhat
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`tortuous, but by no means unforeseeable, path. This path led Lambeth from his initial
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`consultations concerning reverse engineering of Defendants’ products, to his formal engagement
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`of
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` in June 2009, and
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`ultimately to the instant litigation. Plaintiff’s declarations evidence a sincere and objectively
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`manifest desire, throughout his work with his colleagues, to enforce the ‘988 patent through
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`litigation. For these reasons, the Court finds that Lambeth’s communications with
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` and
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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 9 of 13
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`concerning reverse engineering are subject to protection under the work product
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`privilege.4
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`2. LMS’s communications with
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`Defendants also request access to documents from
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`, a company Plaintiff
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`used in 2014 to perform reverse engineering tests of Defendants’ products for the purpose of
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`establishing Lambeth’s patent infringement case. The Court finds that these documents naturally
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`fall within the work product privilege for the same reasons as the reverse engineering
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`communications with
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` analyzed above. However, rather than contest the
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`application of this doctrine, Defendants argue that Plaintiff has waived any claim to privilege by
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`selectively citing the
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` tests in its infringement contentions and incorporating them
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`by reference into its interrogatory responses. (Seagate’s Brief, p. 1; Western Digital’s Brief, p.
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`8.) Such reliance, Defendants contend, amounts to using privilege as both a sword and a shield
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`because Plaintiff both uses the tests to show infringement and seeks the benefit of privilege to
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`prevent disclosure of potentially unfavorable test results. Id.
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`Closely examining the manner in which Plaintiff draws on the
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` materials,
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`the Court disagrees with Defendants. As explained below, Plaintiff has not yet relied on these
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`materials as evidence to support its infringement claims. Thus, Plaintiff has not waived its
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`privilege.
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`4 Seagate has not argued that it has a substantial need for these materials and that it will suffer
`undue hardship in their absence. Western Digital has put forward such an argument based on
`speculation that these communications might disclose the nature of certain processing conditions
`referenced in the ‘988 patent that bear on whether the patent contains sufficient precision to be
`enabled. (Western Digital’s Brief, p. 7-8.) The Court finds that Western Digital has not
`established a need for these documents nor that it will suffer undue hardship if they are not
`produced.
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`

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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 10 of 13
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`In Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, 2010 WL
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`4537002 (M.D. Pa. Nov. 3, 2010), the court addressed precisely the issue of whether a party
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`waives the work product privilege as to testing cited in preliminary infringement contentions.5
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`In particular, the court concluded that “preliminary infringement contentions provide notice of
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`the accusing party’s specific infringement theories, and are not considered evidence.” Id. at *2
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`(citing Fast Memory Erase, LLC v. Spansion, Inc., 2009 WL 4884091, at *2 (N.D. Tex. Dec. 16,
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`2009)). The Kimberly-Clark court also found, however, that if the plaintiff asserting work
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`product privilege relied on the testing at issue as evidence to support infringement claims, then
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`justice would require that defendants have a right to the materials in order to defend themselves.
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`Id. And the Kimberly-Clark court noted that if the plaintiff “actually relies upon this data,
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`[defendant] . . ., by voluntarily disclosing the materials in such a situation, . . . would be waiving
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`the privilege.” Id. The Court of Appeals for the Third Circuit has provided additional guidance
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`that bears on whether the disclosure of work product to an adversary waives the privilege: if such
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`disclosure is consistent with the purpose of the privilege (enabling clients to obtain advice
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`without fear that it will be used against them in litigation), then disclosure alone does not waive
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`the privilege. Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1429 (3d
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`Cir. 1991).
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`This Court agrees with the Kimberly-Clark court that the appropriate distinction to be
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`drawn is whether the party asserting the privilege at the present stage of the patent litigation
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`relies upon the test results as evidence to support infringement or merely cites test results to
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`5 The Local Patent Rules for the Western District of Pennsylvania refer to these preliminary
`disclosures as the “Disclosure of Asserted Claims and Infringement Contentions” rather than
`“preliminary infringement contentions.” See LPR 3.2. For ease of reference the Court will refer
`to these as Plaintiff’s “preliminary infringement contentions” or “preliminary disclosures.”
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`

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`Case 2:16-cv-00541-CB Document 115 Filed 01/18/18 Page 11 of 13
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`place an opposing party on notice. This principle also is consistent with the structure of the
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`Local Patent Rules for the Western District of Pennsylvania, which require a plaintiff to disclose
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`within thirty days of the initial scheduling conference, “as specific[ally] as possible,” the asserted
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`infringing technology. LPR 3.2(a)-(b)(2). Finding a waiver of privilege as to any testing cited at
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`this early stage of litigation would cut against both the purpose of the privilege (protecting
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`clients’ ability to seek preparatory advice without fear) and the purpose of the local rule
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`(providing defendants with early notice of specific claims).
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`Here, the test results Plaintiff cites in its preliminary infringement contentions are macro-
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`level external and internal photographs of the accused devices showing the location of asserted
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`structures, as well as several images showing a microscopic structure within the accused device.
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`(Ex. 5-A to Seagate’s Brief, Doc. 89-7.) Plaintiff’s preliminary disclosures were not provided to
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`the Court to establish infringement, nor were they filed on the docket until the instant dispute,
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`when Seagate attached them under seal. Cf. Koninklijke Philips Elecs. N.V. v. Zoll Med. Corp.,
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`2013 WL 812484, at *2 (D. Mass. Mar. 4, 2013) (relying on public nature of document in
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`finding waiver). The purpose of these images in context was to place Defendants on notice of
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`the specific nature of Plaintiff’s claims in compliance with the local patent rule. Thus, Plaintiff
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`has not waived its work product privilege merely by citing to them in its preliminary
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`infringement contentions.6 However, should Plaintiff rely on the
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` tests at a
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`subsequent stage of these proceedings as evidence to demonstrate infringement, the Court will
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`find that Plaintiff has waived its privilege and will require production of these materials.
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`6 The fact that Plaintiff summarily incorporated its preliminary disclosures into its interrogatory
`responses does not alter this analysis.
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`

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`3. LMS’s communications, including agreements, with litigation-funding organizations
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`Finally, Defendants seek production of Plaintiff’s communications with
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` from October 2010 to April 2013. Plaintiff’s
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`declarations identify these individuals as follows:
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`. The communications in the relevant
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`periods concerned
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` in anticipation of litigation to enforce the patent and, later, in anticipation of litigation
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`to reacquire the ‘988 patent from Acacia. (Lambeth Declaration at ¶¶ 5-8.)
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`Id. As previously found, these communications took place during a period when Lambeth
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`actually and reasonably foresaw litigation. And, the evidence clearly establishes that these
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`communications were primarily, perhaps exclusively, for the purpose of preparing for litigation.
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`Defendants’ arguments premised on the non-legal nature of Plaintiff’s relationships with
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` are unavailing. Even if the Court were to fully credit this argument
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`and consider the relationships to be commercial, the materials nonetheless fall within work-
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`product immunity because they were communications with Plaintiff’s agents and in anticipation
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`

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`of litigation.7 See Fed. R. Civ. Pro. 26(b)(3)(A) (protecting “documents . . . prepared in
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`anticipation of litigation . . . by or for another party or its representative (including the other
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`party’s . . . consultant . . . or agent)”).
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`Defendants also seek an unredacted copy of Plaintiff’s agreement with
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`, which
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`contains information relevant to LMS’s and
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`. Like the
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`materials discussed above, Plaintiff’s agreement with
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` was undisputedly prepared in
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`anticipation of the instant litigation and for the purpose of pursuing the litigation. As a result, all
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`of these materials are shielded under work product protection.8
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`* * *
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`For the reasons stated above, the Court hereby orders that Defendants’ Motions to
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`Compel (Civil Action No. 16-538, Doc. 87; Civil Action No. 16-541, Doc. 98) are DENIED.
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`IT IS SO ORDERED.
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`December 19, 2017
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`cc (via ECF email notification):
`
`All Counsel of Record
`
`s\Cathy Bissoon
`Cathy Bissoon
`United States District Judge
`
`7 Defendants cite several cases for the proposition that commercial communications and fee
`arrangements cannot be privileged. However, these cases primarily analyze the application of
`the attorney-client privilege, for which a lawyer-client relationship is essential. E.g.,
`Montgomery County v. MicroVote Corp., 175 F.3d 296, 304 (3d Cir. 1999) (“The attorney-client
`privilege does not shield fee arrangements.”); Net2Phone, Inc. v. Ebay, Inc., 2008 WL 8183817,
`at *7-8 (D.N.J. June 26, 2008) (for the common interest doctrine under attorney-client immunity
`to apply, the parties’ interests cannot be those of adverse parties “negotiating at arm’s length a
`business transaction” (internal citation omitted)).
`8 Defendants do not argue, nor have they shown, that there is a substantial need for these
`materials and that they will suffer undue hardship in their absence.
`
`