1

1 IN THE UNITED STATES DISTRICT COURT

2 IN AND FOR THE DISTRICT OF DELAWARE

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4 ZTE CORPORATION, ) Civil Action

)
5 Plaintiff, )
)
6 v. )
)
7 VRINGO, INC., and )
VRINGO INFRASTRUCTURE, )
8 INC., )
)
9 Defendants. ) No. 15-132-UNA

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11 Wilmington, Delaware
Tuesday, February 10, 2015
12 11:00 a.m.
Telephone Conference
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14
BEFORE: HONORABLE GREGORY M. SLEET, U.S.D.C.J.
15
APPEARANCES:
16
MARY B. MATTERER, ESQ.
17 Morris James LLP
-and-
18 BARRY SHELTON, ESQ.
Pillsbury Winthrop Shaw Pittman LLP
19 (San Diego, CA)

20 Counsel for Plaintiff

21 MICHAEL J. FARNAN, ESQ.

Farnan LLP
22 -and-
KARL GEERCKEN, ESQ.,
23 AMBER WESSLES-YEN, ESQ., and
MARK A. McCARTY, ESQ.
24 Alston & Bird LLP
(New York, NY)
25
11:03:37 Counsel for Defendants
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11:03:37 1 THE COURT: Good morning, counsel. Who is on

11:03:43 2 the ine for ZTE Corporation?

11:03:47 3 MS. MATTERER: Good morning, Your Honor. Mary

11:03:50 4 Matterer at Morris James. I have with me on the phone Barry

11:03:54 5 Shelton from the Pillsbury Winthrop law firm.

11:03:57 6 THE COURT: Good morning.

11:03:58 7 For Vringo.

11:04:00 8 MR. FARNAN: Good morning, Your Honor. This is

11:04:02 9 Michael Farnan. With us on the line are Karl Geercken,

11:04:07 10 Amber Wessles-Yen, and Mark McCarty from Alston & Bird, also

11:04:13 11 Jake Menchaco (phonetic), head of litigation for Vringo.

11:04:17 12 THE COURT: Let me start off by making this

11:04:20 13 observation. That is simply this.

11:04:24 14 I made a mistake, insofar as I didn't pay good

11:04:32 15 attention, didn't pay enough attention, if any attention, to

11:04:36 16 Rule 65. I have no excuse for that. That is just bad

11:04:41 17 judging.

11:04:43 18 I appreciate Vringo's observations in being

11:04:50 19 rather gentle with me in this regard. You might have been

11:04:54 20 within your rights to, perhaps not wisely, but to lay me low

11:05:02 21 for that.

11:05:02 22 In any event, I say these things because it is

11:05:04 23 clear to me that ZTE, the movant here, was not compliant

11:05:10 24 with Rule 65's requirements in the ways it should have been.

11:05:17 25 Perhaps more important than that, or just as

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11:05:19 1 important, I feel, after reading the response by Vringo

11:05:31 2 today and also reflecting on communications that my staff

11:05:38 3 attempted to have, or did have with Delaware counsel here

11:05:44 4 for ZTE, in our effort when we first got the papers -- this

11:05:50 5 came into my chambers as a duty matter -- so this was not

11:05:53 6 something that was on my list of things to do. That's not

11:05:57 7 an excuse. But it is a fact.

11:06:01 8 My immediate, as it is in every instance when I

11:06:05 9 get a request for a TRO, instinct is to see if we can reach

11:06:09 10 out to whomever is on the other side because our adversary

11:06:13 11 system works best when we have parties on both sides of the

11:06:17 12 V.

11:06:19 13 We were told that, prior to my issuance of the

11:06:26 14 injunction, that the moving party's attorneys didn't have

11:06:32 15 information about anyone else on the other side. Therefore,

11:06:37 16 I couldn't have my staff reach out to them and get them on a

11:06:42 17 call, which I would have liked to have done.

11:06:47 18 I would say that it seems that ZTE was effective

11:06:53 19 in crying wolf loud enough that you got my attention and

11:06:57 20 caused me to improperly issue a temporary restraining order.

11:07:05 21 You know, when I see things like the following,

11:07:12 22 in opposing papers, which I am able to confirm

11:07:17 23 independently, like what's written here at Page 2 of

11:07:24 24 Vringo's brief in support of its motion to dissolve the

11:07:27 25 injunction: ZTE failed to inform this Court of a pending

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11:07:31 1 litigation between the parties in the U.S. District Court

11:07:34 2 for the Southern District of New York, it adds, in which ZTE

11:07:39 3 took a contrary position on the United States Court's

11:07:41 4 ability to issue an injunction impacting the jurisdiction of

11:07:46 5 the foreign Court. That latter part of the sentence is

11:07:49 6 certainly important, but not as important to me as the

11:07:54 7 failure to inform me that there was a pending litigation.

11:07:56 8 Moreover -- Vringo writes -- moreover ZTE

11:07:58 9 engaged in questionable conduct when seeking relief from

11:08:02 10 this Court giving Vringo only a few hours notice before

11:08:05 11 seeking an ex parte hearing, after ZTE informed Vringo that

11:08:11 12 this Court, meaning me, would be, quote, 'flexible' in

11:08:15 13 setting a hearing and after ZTE was informed that Vringo was

11:08:21 14 looking to engage for counsel."

11:08:22 15 Clearly, ZTE knew that Vringo had lawyers at

11:08:27 16 least engaged in a litigation in New York to whom I could,

11:08:31 17 whom I could have contacted or had my staff contact, at

11:08:34 18 least to alert them to what was going on and get the benefit

11:08:38 19 of the views of opposing parties, which is when this system,

11:08:43 20 we call an adversary system, works best.

11:08:48 21 I have talked to Judge Kaplan this morning. We

11:08:53 22 commiserated on the happenings here, not altogether a happy

11:09:01 23 visit. But he is ready, willing and able to take the

11:09:08 24 litigation, which I am going to transfer, I am going to

11:09:12 25 issue an order forthwith dissolving the injunction and

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11:09:17 1 transferring this matter up to the Southern District of New

11:09:22 2 York to join along with the civil action, it's styled Vringo

11:09:35 3 Inc., et al. versus ZTE Corp., No. 14-CV-4988SDNY. It's

11:09:46 4 Judge Louis Kaplan presiding.

11:09:52 5 Mr. Shelton, Ms. Matterer, do you want to say

11:09:55 6 anything for yourselves?

11:09:57 7 MR. SHELTON: Yes, I do, Your Honor.

11:10:00 8 THE COURT: Go ahead.

11:10:01 9 MR. SHELTON: Thank you, Your Honor.

11:10:03 10 We did indeed know that Alston & Bird

11:10:06 11 represented the Vringo entities in the New York action. And

11:10:11 12 my partner Steve Moore contacted them on the morning of last

11:10:15 13 Friday, the 6th, and alerted them to the fact that the case

11:10:20 14 was being filed in your Court --

11:10:23 15 THE COURT: You didn't tell Delaware counsel,

11:10:24 16 apparently, of this fact. Maybe you did. And I would be

11:10:28 17 really disappointed to hear that you did and that Ms.

11:10:31 18 Matterer knew of that engagement and didn't advise Mr.

11:10:37 19 Buckson when he called -- when she called back to Ms.

11:10:41 20 Tyer-Daly, didn't advise her then.

11:10:45 21 MR. SHELTON: The answer we got, Your Honor, was

11:10:47 22 that Alston & Bird did not know whether they would be

11:10:50 23 retained by Vringo to represent them and that they were

11:10:54 24 contacting the clients. So we alerted them in the morning,

11:10:57 25 and it took them all day until they finally were retained.
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11:11:02 1 THE COURT: But you knew at that time, counsel,

11:11:05 2 you knew of the existence, potential existence of

11:11:08 3 representation. You knew that there were actions that were

11:11:11 4 extant in this matter, that were related to this action.

11:11:16 5 And at the very least, I would have expected, if I were in

11:11:21 6 your shoes, I would have said, Judge, there is a New York

11:11:25 7 action, there is New York counsel, we could reach out.

11:11:29 8 Why would you want this to be issued ex parte?

11:11:33 9 That's not a preferred way to proceed, at least in my view.

11:11:40 10 MR. SHELTON: Your Honor, we did contact that

11:11:42 11 counsel expeditiously. The delay in being engaged by their

11:11:50 12 client doesn't fall at our feet. We did alert them.

11:11:54 13 THE COURT: Let me get a response to that from

11:11:56 14 the other side.

11:11:56 15 MR. GEERCKEN: Your Honor, thank you for hearing

11:12:02 16 us on an expedited basis. We appreciate it.

11:12:05 17 We at first learned of this action early Friday

11:12:08 18 morning around 10:30. My partner, Amber Wessles, received a

11:12:14 19 call from Steve Moore less than 15 hours after the action

11:12:18 20 was filed. It was a brief caul. Mr. Moore advised her that

11:12:22 21 there was an action pending. We did not receive a courtesy

11:12:26 22 set of the papers. Ms. Wessles has informed Mr. Moore that

11:12:29 23 I am lead counsel for Vringo in New York and I had several

11:12:33 24 meetings, I had a board meeting for a not-for-profit that I

11:12:36 25 was leading and that I had another internal meeting, and
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11:12:39 1 that we were going to be trying to get with Vringo to find

11:12:42 2 out if we would be representing them.

11:12:46 3 Vringo, you should know, Your Honor -- and this

11:12:48 4 was known by our adversary -- was difficult to get in touch

11:12:52 5 with individually at Vringo as they were engaged, getting

11:12:58 6 ready for a meeting with high-ranking CPE officials that

11:13:04 7 were out of state.

11:13:06 8 My opposing counsel knew about this.

11:13:09 9 Nonetheless, within three hours, Ms. Wessles was able to get

11:13:13 10 with me. We were able to get with Mr. Menchaco, who is on

11:13:18 11 the call with us. And I believe by 2:30 --

11:13:22 12 UNIDENTIFIED SPEAKER: It's 1:53.

11:13:25 13 MR. SHLETON: At 1:53 p.m. in the afternoon,

11:13:27 14 Ms. Wessles was able to call Mr. Moore or send him an e-mail

11:13:32 15 letting him know that we would be representing Vringo, and

11:13:35 16 that given my schedule, Tuesday morning would be the most

11:13:43 17 efficient or the most -- the best time for a meeting with

11:13:48 18 the Court.

11:13:49 19 We then received an e-mail from Mr. Moore about

11:13:53 20 a half-hour later, 2:21 in the afternoon, advising us that

11:14:01 21 opposing counsel was in the process of serving Vringo's

11:14:07 22 Delaware agent with process and they also attached a copy of

11:14:11 23 Your Honor's order granting the TRO and injunctive relief.

11:14:17 24 We respectfully submit that we moved quickly and

11:14:20 25 reasonably as possible. Certainly, we did not take all day.

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11:14:25 1 It was a matter of at most three hours. And there were some

11:14:28 2 exigent circumstances, as there was a meeting with the

11:14:34 3 opposing party in China, and nonetheless we moved quickly

11:14:40 4 and got back to Mr. Moore as quickly as we could.

11:14:44 5 That would my be my response, Your Honor.

11:14:47 6 THE COURT: Mr. Shelton, I don't know if you

11:14:48 7 want to react to that. I don't need to hear much more. I

11:14:53 8 have already, I and my a law clerk, have devoted time to a

11:14:57 9 matter which, frankly, isn't on my docket. By virtue of my

11:15:02 10 being the assignee during that time when it came in, it came

11:15:05 11 to my attention. But I feel like I have already devoted

11:15:10 12 resources that I shouldn't have had to in the way I did. I

11:15:14 13 am a little mad at myself, quite frankly, for not being

11:15:17 14 careful.

11:15:20 15 I think you have unhappily succeeded in raising

11:15:24 16 the antenna, putting yourself not in a good way on the radar

11:15:28 17 screen of two federal judges, myself and Judge Katplan. But

11:15:34 18 he will speak for himself.

11:15:37 19 Anything else?

11:15:38 20 MR. SHELTON: I understand your point, Your

11:15:39 21 Honor.

11:15:39 22 THE COURT: Good. Take care, counsel. I will

11:15:41 23 issue the order forthwith.

11:15:43 24 (Telephone conference concluded at 11:15 a.m.)

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