Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 1 of 5. Plaintiffs, Defendants. Defendants.

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1 Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 1 of 5 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK VRINGO INC. and VRINGO INFRASTRUCTURE, INC., Civ. Action No. 14-cv-4988 (LAK) Plaintiffs, -against- ZTE CORPORATION and ZTE (USA) INC., Defendants. ZTE CORPORATION, Plaintiff, Civ. Action No. 15-cv-0986 (LAK) -against- VRINGO INC. and VRINGO INFRASTRUCTURE, INC., Defendants. ZTE'S RESPONSE TO THE COURT'S JULY 24, 2015 ORDER TO SHOW CAUSE Robert F. Perry Jeffrey J. Catalano Charles M. McMahon Paul A. Straus BRINKS GILSON & LIONE Brian A. Jones David A. Joffe NBC Tower Suite 3600 KING & SPALDING LLP 455 North Cityfront Plaza Drive 227 West Monroe Street 1185 Avenue of the Americas Chicago, IL Chicago, IL New York, NY Tel.: Tel: Tel: Fax.: Fax: Fax: Jay H. Reiziss Jeff E. Butler John P. Alexander 500 N. Capitol St., NW CLIFFORD CHANCE US LLP Washington, DC West 52nd Street Tel: New York, NY Fax: Tel ATTORNEYS FOR ZTE CORPORATION AND ZTE (USA) INC.

2 Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 2 of 5 Introduction On July 24, 2015, the Court ordered that ZTE show cause why it should not be sanctioned pursuant to Rules 11 and 37(a)(5)(A) of the Federal Rules of Civil Procedure in connection with ZTE's opposition to Vringo's motion to compel the deposition of ZTE's General Counsel, Guo Xiaoming (the "Motion to Compel"). ZTE agrees to pay the reasonable expenses incurred in connection with the Motion to Compel pursuant to Rule 37(a)(5)(A), but respectfully submits that no additional sanctions should be imposed. Background Mr. Guo's proposed deposition was the subject of a telephone conference with Magistrate Judge Maas on June 15, At that conference, in response to ZTE's argument that Mr. Guo was an "apex" witness, Judge Maas noted that "I'm not sure that the apex doctrine strictly applies" but reserved decision on whether the deposition would be required. (Exhibit A (Tr. 11:10-24).) Judge Maas also ruled that the depositions of ZTE witnesses generally would be held in New York, but stated that: [a]s to the location of [Mr. Guo's] deposition, I'm likely to rule again that it should be in New York but because it's not clear that he will be deposed I'm going to reserve decision as to where he should be deposed. (Tr. 11:21-24.) Judge Maas confirmed these rulings in a written order that day. [D.I. 132.] In its July 21, 2015 Motion to Compel [D.I. 158], Vringo argued, among other things, that Mr. Guo's deposition was warranted and that it should take place in New York. ZTE opposed the motion on the grounds that the documents cited by Vringo showed that Mr. Guo was an apex employee with no unique knowledge of relevant facts. [D.I. 161.] ZTE also argued that any deposition should take place in Hong Kong.

3 Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 3 of 5 In its July 24, 2015 Order, the Court granted the Motion to Compel and stated that it "preliminarily appears that ZTE's opposition to this motion was entirely frivolous and, in any case, interposed for purposes of delay and harassment." The Court further ordered that ZTE (and its counsel): (Order at 2.) shall show cause, on or before August 7, 2015, why they should not be sanctioned, pursuant to Fed. R. Civ. P. 11(c)(2) on the ground that their opposition to Vringo's motion violated Fed. R. Civ. P. 11(b), and, in any case, why they should not be required, pursuant to Fed. R. Civ. P. 37(a)(5)(A), to pay the movant's reasonable expenses incurred in making this motion, including attorney's fees. Argument I. ZTE DOES NOT OBJECT TO PAYING THE REASONABLE EXPENSES INCURRED IN CONNECTION WITH THE MOTION TO COMPEL. If a motion to compel is granted, Rule 37(a)(5)(A) generally requires the non-moving party to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. Here, the Motion to Compel plainly was granted. Accordingly, ZTE agrees to pay Vringo's reasonable expenses, including attorney's fees, incurred in connection with the motion. II. ADDITIONAL SANCTIONS SHOULD NOT BE IMPOSED. ZTE respectfully submits that its opposition to the Motion to Compel had a reasonable basis in law and fact and was not designed for delay or harassment. Whether Mr. Guo's deposition was necessary and where it should take place appeared to ZTE to be open questions after the June 15 conference with Magistrate Judge Maas. Therefore, and for the reasons set forth in the response submitted today on behalf of King & Spalding LLP, which ZTE incorporates by reference, additional sanctions should not be imposed. 2

4 Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 4 of 5 In addition, ZTE respectfully submits that given its agreement to pay Vringo's reasonable expenses in making the Motion to Compel pursuant to Rule 37(a)(5)(A), additional sanctions pursuant to Rule 11 are not warranted. See Fed. R. Civ. P. 11(d) ("This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rule 26 through 37."); id. advisory committee's note to 1993 amendment ("It is appropriate that Rules 26 through 37, which are specially designed for the discovery process, govern such documents and conduct rather than the more general provisions of Rule 11"); see also Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, (2d Cir. 2000). Dated: New York, NY August 7, 2015 CLIFFORD CHANCE US LLP 3 s/ Jeff E. Butler Jeff E. Butler John P. Alexander CLIFFORD CHANCE US LLP 31 West 52nd Street New York, NY Tel Robert F. Perry Paul A. Straus David A. Joffe KING & SPALDING LLP 1185 Avenue of the Americas New York, NY Tel: Fax: Jeffrey J. Catalano BRINKS GILSON & LIONE NBC Tower Suite North Cityfront Plaza Drive Chicago, IL 60611

5 Case 1:14-cv LAK-FM Document 203 Filed 08/07/15 Page 5 of 5 Fax.: Tel.: Charles M. McMahon Brian A. Jones 227 West Monroe Street Chicago, IL Tel: Fax: Jay H. Reiziss 500 N. Capitol St., NW Washington, DC Tel: Fax: ATTORNEYS FOR ZTE CORPORATION and ZTE USA INC. 4