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PLAINTIFF’S RESPONSE TO DEFENDANTS’ MOTION FOR A STATUS CONFERENCE AND SCHEDULE FOR FED. R. CIV. P. 16(b) CONFERENCE

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Plaintiff e.Digital Corporation (“e.Digital”) files this Response to Defendants’ Motion for a Status Conference and Schedule for Fed. R. Civ. P. 16(b) Conference (“Defendants’ Motion”) to provide context for the relief sought in the motion and to more fully describe the dealings between the parties that led to the filing of Defendants’ Motion.

1. INTRODUCTION

As set forth in the Certificate of Compliance in Defendants’ Motion, e.Digital believes that the next step is for the Court to set a Rule 16(b) Scheduling Conference and e.Digital joins in that request by the Defendants. As to Defendants’ request for a status conference, e.Digital notes that the parties have already had a status conference with each of Judge Krieger and Magistrate Judge Watanabe. e.Digital believes the parties’ time is better spent working together on a case schedule and related issues, such as a protective order, rather than wait for a third status conference.1 Then, the parties will be best positioned to seek the Court’s guidance in areas of disagreement, if any remain, at the next status conference or Rule 16 Scheduling Conference. Accordingly, e.Digital does not oppose Defendants’ request for a status conference, but it does not join in that request at the current time, unless such a conference is to provide an immediate deadline for Defendants to fulfill their obligations under the Federal Rules of Civil Procedure to participate in a Rule 26(f) conference with e.Digital.

2. CURRENT PROCEDURAL POSTURE

e.Digital filed its Complaint on November 2, 2009. Thereafter, many of the Defendants requested extensions of time to respond to the Complaint, which e.Digital did not oppose. However, certain Defendants chose to answer the Complaint and the first Answer was filed by Sakar International, Inc. on December 15, 2009.2 (Doc. No. 10.) Thereafter, on January 7 and 20, the Court held two status conferences and encouraged the parties to work together to develop a schedule that addressed the complications of a multi-defendant patent infringement lawsuit.3 Certain deadlines under the Federal Rules of Civil Procedure were triggered by Sakar’s filing of its Answer on December 15, 2009. Among the deadlines, Rule 16(b)(2) provides that the Court shall issue a scheduling order the earlier of 120 days after any defendant has been served or 90 days after any defendant has appeared. In this case the 90 day deadline controls based on the timing of Sakar’s Answer, which was filed less than 30 days after the first Defendant was served. Accordingly, under Rule 16(b)(2), a scheduling order is due March 15, 2010 and the parties are required to conduct a Rule 26(f) conference 21 days before that date, i.e., February 22.4 See Fed. R. Civ. P. 26(f). Local Rule 16.1 does not appear to change the February 22 deadline and the Defendants’ refusal to engage in a Rule 26(f) conference was the catalyst for Defendants’ Motion.

3. e.DIGITAL’S ATTEMPTS TO SCHEDULE A RULE 26(f) CONFERENCE

On February 16, e.Digital reached out to the Defendants to schedule the Rule 26(f) conference and proposed February 18 as the date for the conference. (See email exchange between counsel for Plaintiff and Defendants attached hereto as Exhibit B at p. 10 (relevant excerpts underlined in red).) At the same time, e.Digital provided to the Defendants a proposed protective order, as was suggested by this Court at the January 20 Status Conference so that discovery would not be delayed following the Scheduling Conference to be set by the Court. Initially, certain Defendants expressed a willingness to conduct the Rule 26(f) conference on February 18. (See, e.g., Exhibit B at p. 9.) However, on February 17, a representative counsel for the Defendants notified e.Digital that the Defendants were not prepared to address all of the issues required to be discussed at the 26(f) conference, as set forth in the form Scheduling Order. (Id. at p. 7.) The Defendants suggested that they were unsure whether the deadline for the 26(f) conference actually was February 22 and, in any case, requested that e.Digital provide a proposed scheduling order that the Defendants could review for one week in advance of a 26(f) conference to frame the discussion.5 (Id.)

In response to Defendants’ request for a proposed scheduling order, e.Digital provided a proposed order the next day and explained why it believed the Rule 26(f) conference needed to take place by February 22 in order to comply with the Federal Rules. (Id. at p. 6; see also, Doc. No. 189-6 (proposed Scheduling Order).) After receiving e.Digital’s proposed scheduling order, the Defendants changed course and notified e.Digital that they would not participate in a Rule 26(f) conference and, instead, they intended to seek a status conference from this Court. (Id. at p. 5.) Defendants claimed that a status conference was necessary because e.Digital refused to engage in a scheduling discussion that was limited to Markman deadlines only. In other words, the Defendants were unwilling to address the issues of Markman in the context of the proposed scheduling order, as required by the Federal Rules and Local Rules and, instead, Defendants would only agree to discuss limited Markman issues in a vacuum, and not in the context of an overall case schedule. Simply put, this approach makes no sense.

4. DEFENDANTS’ PROPOSAL IS UNWORKABLE

Defendants’ motivation for refusing to engage in a Rule 26(f) conference soon became clear. Defendants do not want to participate in any discovery prior to completing claim construction and because Defendants recognize that discovery will open following a Rule 26(f) conference. Thus, Defendants refused to participate in the Rule 26(f) conference required under the Federal Rules based on the filing of Sakar’s Answer. With the goal of avoiding discovery in mind, Defendants proposed that the parties complete Markman before any discovery is taken and, when e.Digital did not agree to this obviously one-sided approach, Defendants refused to engage in any further discussions. Defendants’ approach to the Markman process, however, makes no sense and is wasteful of judicial resources and the parties’ resources. As set forth in the Defendants’ proposal, attached as Exhibit C to Defendants’ Motion (Doc. No. 189-4), Defendants propose that the parties immediately engage in a Markman process limited to the claims identified in the Amended Complaint. The Defendants contend that this Markman process should commence before Defendants even respond to the Amended Complaint and before any discovery is exchanged.6

Defendants’ suggestion would require two separate Markman briefing cycles and Markman hearings -- the first to address the claims identified in the Amended Complaint, and a second Markman cycle to address claims that not identified in the Amended Complaint but that e.Digital asserts following discovery related to the operation of the accused products and Defendants’ invalidity contentions. Because the Defendants’ products incorporate proprietary technology, e.Digital has less than a full understanding regarding the operation of most, if not all of the accused products. Accordingly, e.Digital identified claims in the Amended Complaint that it believes are infringed based on publicly available information, but e.Digital needs discovery of more detailed information regarding the operation and design of the Defendants’ products to confirm whether additional claims of the Patents-in-Suit are infringed. Without the benefit of this discovery, as well as discovery related to Defendants’ invalidity contentions, e.Digital cannot provide a complete list of the claims it intends to assert, and the Court and the parties cannot engage in a process to resolve all Markman issues.

Defendants are well aware of this inherent problem with their proposal because e.Digital alleged in its Amended Complaint (first provided to Defendants on February 10) that it intends to assert additional claims after it confirms infringement of those claims through discovery. (See Doc. No. 188 (Amended Complaint) at ¶¶ 67 (“e.Digital reserves the right to and anticipates that it will amend or supplement its identification of asserted claims based on information that it obtains through discovery in this matter and/or in response to the positions taken by the Defendant(s) with respect to their counter-claim(s) that the ‘737 Patent’ is invalid”) and 44.) Likewise, e.Digital informed the Defendants at the January 7 Status Conference that it may need to identify additional asserted dependent claims based on the invalidity positions that the Defendants may take. (January 7 Hearing Transcript (Ex. A) at pp. 19:20-20:7.) Yet, Defendants still made this inherently unworkable proposal under the guise of trying to be efficient and creative. The undersigned counsel represents it has been involved in a multitude of patent cases (representing both plaintiffs and defendants) involving multiple defendants and it has never seen a case schedule implemented under which Markman took place prior to discovery. The reason for this is because such an approach has inevitable case inefficiencies built into it, including the likely need for multiple Markman hearings.

In light of the inherent problems with Defendants’ proposal, it should have come as no surprise to Defendants that e.Digital would not agree to the proposed Markman-only schedule. Simply put, no efficiencies can be gained from Defendants’ proposal.7 Rather, e.Digital has repeatedly requested that the parties engage in a Rule 26(f) conference to work through all scheduling, discovery and related issues so the disputed issues can be narrowed and addressed at one time by the Court in a single Rule 16(b) Scheduling Conference. (See Ex. B (includes repeated requests between February 16 and 19, 2010).)

CONCLUSION

This Court already has instructed the parties to work together to come up with a way to efficiently deal with this multi-patent, multi-defendant case. e.Digital has repeatedly expressed a willingness to discuss with Defendants proposals to achieve that objective. By comparison, the Defendants have made a single proposal that is limited to a small subset of the issues in this case (i.e., claim construction in a vacuum) and would waste everyone’s resources. Now, after that proposal was not accepted by e.Digital, the Defendants seek this Court’s involvement, rather than engage in any dialogue with e.Digital as to whether a compromise position can be reached, as envisioned by Rules 16 and 26. At the same time, Defendants have attempted to hijack the opening of the discovery period by unilaterally refusing to participate in a Rule 26(f) conference.

In light of the foregoing, e.Digital joins in the Defendants’ request that a Rule 16(b) Scheduling Conference be set by the Court as soon as possible. Although the fact that such a conference has not been set does not justify Defendants’ refusal to engage in a Rule 26(f) conference, setting such a conference will force the Defendants to engage in scheduling discussions and bring the scheduling issues to a head so that this case can proceed. Furthermore, to the extent that the Court believes an intermediary status conference is necessary to advise the parties as to their obligations under Federal Rules 26 and 16, e.Digital requests that such a conference be set as soon as possible so this case is not unnecessarily delayed anymore, and so that the parties can commence with discovery.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

Dated: February 23, 2010 Respectfully submitted,

DUANE MORRIS LLP

By: /s/ Matthew S. Yungwirth

L. Norwood Jameson (Ga Bar No. 003970)

E-mail: wjameson@duanemorris.com

Matthew S. Yungwirth (Ga Bar No. 783597)

E-mail: msyungwirth@duanemorris.com

1180 West Peachtree Street, Suite 700

Atlanta, Georgia 30309

Telephone: 404.253.6935

James Y. C. Sze (CA SBN 203274)

E-mail: jsze@duanemorris.com

Heather U. Guerena (CA SBN 238122)

E-mail: huguerena@duanemorris.com

101 West Broadway, Suite 900

San Diego, CA 92101

Telephone: 619.744.2200

FAEGRE & BENSON, LLP

Natalie Hanlon-Leh

Jared B. Briant

3200 Wells Fargo Center

1700 Lincoln Street

Denver , CO 80203-4532

Telephone: 303-607-3500

Email: nhanlon-leh@faegre.com

jbriant@faegre.com

Attorneys for e.Digital Corporation

Footnotes seen throughout doc as follows:

1 e.Digital notes that there is already a Status Conference with Judge Watanabe set for April 1, 2010. (See Doc. No. 144 (setting April 1 status conference).)

2 On January 28, 2010, Defendants Canon USA, Inc. and VTech Electronics North America, LLC also filed their Answers.

3 Following those status conferences, e.Digital notified the Defendants that it intended to amend its Complaint as soon as possible to provide more detail about its theories of infringement, to correct the names of certain Defendants, and to add a claim for infringement of U.S. Patent No. 5,742,737. e.Digital provided this notification at Judge Krieger’s suggestion that e.Digital amend its Complaint to provide more detail. (January 7 Hearing Transcript (Doc. No. 124) at pp. 21:23-22:4 (excerpts cumulatively attached as Exhibit A).)

4 The Rule 26(f) conference is a critical juncture in any case and cannot be delayed indefinitely because other events are triggered by having that conference. Among those events is the opening of discovery, which occurs immediately following the Rule 26(f) conference.

5 At that time, the Defendants also made a proposal to initiate immediately the Markman process without the exchange of any discovery or consideration for any of the other topics to be addressed in the form scheduling order. (See Doc. No. 189-4.)

6 The date for a majority of the Defendants to respond to the Amended Complaint is March 26, 2010 by agreement of the parties. (Doc No. 187.)

7 To the extent that Defendants’ real goal is to limit the asserted claims at issue in this case to the claims identified in the Amended Complaint, there is no legal support for that argument. In fact, Form 18 of the Federal Rules of Civil Procedure does not require a patent plaintiff to identify any asserted claims, no less all asserted claims. (See Fed. R. Civ. P., Form 18, attached hereto as Exhibit C.)