petitioner c&d zodiac, inc. exhibit 1008 - page 1

Petitioner C&D Zodiac, Inc. – Exhibit 1008 -

August 23, 2001 Mr. Jorgen Ottosson Contract Manger Scandinavian Airlines System Corporate Aerotechnical Purchasing / STOWJ Fronundaviks Alle 1 Solna SE-195 87 Stockholm Sweden Mr. Ottosson, C&D is pleased to submit the following proposal for the design, manufacture and certification of Galleys, Stowages, Lavatories, Bin Extensions and Interior Components to be installed in SAS’s B737-600, MD80 and MD90 aircraft.

Our proposal outlines and follows the SAS requirements listed in specification GE-2012 (MD80, MD90, B737 Galley & Stowage Units), GE-2013 (Interiors), GE-2014 (MD90, B737 Bin Extensions) and GE-2016 (MD80, MD90, B737 Lavatory Units).

As you know, C&D and SAS have been doing business for over eighteen years now and we believehave become more like a partner to SAS than a supplier.

This program is ideal for C&D in the sense that each of the components specified in your RFQ have been manufactured by C&D in the past. Moreover, C&D is very familiar with SAS’s design requirements and functionality of their components.

If awarded, C&D would be utilizing the same team that has designed and manufactured SAS’s components in the past. This team would be managed technically by Mr. Thanh Nguyen who has been involved in the majority of our programs with SAS.

In addition, this program will be produced in out new state-of-the-art facility located in Huntington Beach, California. This facility is over 140,000 ft2 and has ample capacity to manufacture all the mentioned units. Our newest facility among the C&D companies is home of our owners Mr. James Downey (Chief Executive Officer), Mr. Joe Moran (President) and Mr. Clark Valentine (Chief Industrial Designer) along with our Marketing and Engineering departments.

Enclosed you will find a detailed schedule showing all design reviews and major milestones needed to be met to ensure a successful program. Also included is a comprehensive drawing package detailing a complete scope of work for each aircraft model and, most importantly, a Pricing Matrix is also included for your review. Pricing will include all Terms, Conditions and Incentives applicable to the award of this contract.


Should you have any questions or require any additional information, please do not hesitate to contact me directly. Best Regards, Stan Fisher Scott Savian Thanh Nguyen Marketing Marketing Engineering (714) 934-2263 tel. (714) 934-0000. (714) 934-0000 (714) 934-0089 fax [email protected] [email protected] [email protected]


mailto:[email protected]




DESCRIPTION OF WORK C&D Aerospace understands the New Europe concept to include the components as detailed in the matrix below per the SAS New Europe Request for Quote:

MD81-83 MD87 MD90 737Qty Qty Qty Qty

G2B 20G3B 20G2D 29 15 8G3C 29 15 8G4 29 8G4 Structure 29 8Galley G5 15Coatroom C1 15C2 29 8Stowage S1 20Stowage S2 20S4 29 8Fwd Lav 29 8 20Bin Extensions 8 20PSU 3 1 BFEInteriors 29 15 8 BFE

Please note that C&D has shown the 737 PSU and 737 Interior components (bins and sidewalls) as BFE. It is our belief that the 737 components can be procured by SAS from Boeing for a lower cost than C&D can supply the identical units. Should SAS wish to divest itself from adding a second supplier for these components, C&D will work with Boeing and SAS to meet SAS requirements.

CRITERIA FOR CHOICE OF SUPPLIER With the magnitude of this program, C&D would like to address SAS’s criteria for a supplier one by one.

• Ability to Meet Delivery Dates C&D has shattered all delivery records at Boeing to date, with over 1,500 consecutive on-time deliveries of galley/stowage units contributing to our selection by Boeing as Supplier of the Year in 2001. In our 30+ year history, C&D has never caused an aircraft on ground due to delivery. Our records to


the OEM’s and major airlines is a source of pride to all of the employees at C&D Aerospace.

• Turn Around Time C&D’s ability to meet quick turn around times stems from being an OEM supplier to the major airplane manufacturers (i.e. Airbus, Boeing, Bombardier, and Embraer). C&D delivers over thirty (30) shipsets of narrow body and six (6) wide body interiors floor-to-floor interiors per month, all with varying configurations by airline customer. As a result, C&D’s entire organization has been built to respond quickly to new configurations and the development of new programs.

• After Sales Support and Response Time C&D has a 24-hour A.O.G. and support group in Huntington Beach to respond to customer’s requests in a timely fashion. Standard response times for spares inquiries are as follows:

1. Telephone .......................................................................... Within 4 hours 2. Wire (Fax, Telex, SITA, etc.) ......................................... Within 24 hours 3. Letter .................................................................... Within 3 business days 4. Request for Quotation (Telephone or Fax) ..................... Within 24 hours 5. AOG .................................................................................. Within 4 hours 6. Critical............................................................................... Within 8 hours 7. Expedite ............................................................... Within 3 calendar days In addition, C&D has support personnel all over the world to meet the demands of our OEM customers. In regards to SAS, spare parts will be produced in Huntington Beach, California USA with support personnel in England and France that can assist SAS within hours. If awarded, C&D will stock all high usage spares outlined in our Initial Spares Provisioning catalogue in our Toulouse, France facility, making them available on a 24-hour turn around.

• Operational and Maintenance Costs In C&D’s 30 year history, we have continually strive to produce the highest quality interior components, ensuring low operational and maintenance cost.

• In-House Repair at SAS C&D and SAS have agreements from previous programs. If repair is necessary, the procedure would be to first contact C&D. It would then be decided as to whether we would send new parts, have the parts sent back for repair or forward SAS repair procedures and pay SAS for the time and material.


• Unit & Total Prices Please refer to the Commercial section for itemized pricing.

• Commercial Terms & Conditions Please refer to the commercial section for all terms and conditions.

• Incentives Please refer to the Commercial section for all incentives.

• Warranty Please refer to the Commercial section for warranties.

• References List Please see Attachment A for references names and telephone numbers.

• Organization C&D has over 1,500,000 ft.2 of manufacturing space, over 300 engineers, 14 facilities around the world, two FAA Repair Stations with our own DER and DAR’s on staff for all certification needs and product support personnel within a few hours to aid in technical or mechanical assistance. C&D’s product line covers all interior components in an aircraft (floor-to-floor).

Each C&D facility is predominately self-sufficient, manufacturing the majority of the end product in-house. The cellular work centers allow C&D to remain horizontally integrated, minimize program bottlenecks and spread the product liability amongst the various facilities.

A key benefit to C&D’s company organization is our ability to adapt quickly to changing conditions. Despite each building being responsible for different products / programs, the process flow is standard allowing us to shift priorities and resources almost instantly. This flexibility has proven to be invaluable.

If awarded the New Europe program, C&D will assign a program manager responsible for all aspects of the development and delivery. The program manager will be assisted by a skilled engineering team headed by Thanh Nguyen.

• Assessment of Risk With a history of seventeen (17) years of doing business together, there should be virtually NO RISK in selecting C&D for this program. As stated, C&D has produced 90% of the proposed interior items for SAS in the past.

• Supplier Professionalism and Experience Just recently, C&D has been selected by Boeing as their Supplier of the Year. Mr. James Downey (Chief Executive Officer) has been selected Entrepreneur of the Year by the Orange County Business Journal. C&D has been


recognized as the largest full-up/turnkey interior company in the world and the only privately held company of its size and nature operating today.

• Ethics C&D’s reputation is based on good, solid relationships with our OEM’s and airline customers. Our goal is to become partners with our customers, not just a supplier, developing a mutually beneficial, long-term relationship. This allows us to speak freely and offer fair incentives that benefit both companies.

• Environmental Awareness C&D proudly complies with all California regulations, by far the strictest environmental laws in the US. Our in-house training and self-monitoring system to regulate shelf life and hazardous materials ensures that C&D remains environmentally friendly. In addition, CAL OSHA (Occupational Safety and Health Association) and SCAQMD (South Coast Air Quality Management District) frequently visit C&D to review our materials and manufacturing processes. In addition, our local fire department ensures that C&D is compliant with the regulations governed by state and local law. C&D has also filed an emergency evacuation plan with the fire department which discloses all on-site hazardous materials.

• Over-All Solution C&D Aerospace approaches all jobs as an opportunity to improve for ourselves and our customer. We continually strive to improve quality, reduce weight, and lower overall costs while producing the most aesthetically appealing and functional interiors in the industry. It is this dedication that allows us to deliver the best overall solution at the right price.

• Accept Audit C&D welcomes SAS to audit our facilities. C&D has been audited by all of the major OEM’s and most of the major US airlines.


COMMERCIAL PROPOSAL For clarity, C&D has supplied all pricing in matrix format. Both the recurring and non-recurring include individual unit pricing with totals for the individual units on the right and aircraft model and fleets at the bottom. Also included is an entire SAS2003 Europe package discounted price at the bottom. Recurring Pricing C&D provides the following pricing matrix:

RECURRING Qty Price Qty Price Qty Price Qty Price Qty PriceG2B

G3B

G2D

G3C

G4

G4 Structure

Galley G5

Coatroom C1

C2

Stowage S1

Stowage S2

S4

Fwd Lav

Bin Extensions

PSU

Interiors

Per Aircraft Total

Fleet TotalFleet Discount

Full SAS2003 Package Price $

TOTALMD81-83 MD87 MD90 737

TOTALMD81-83 MD90MD87 737


The PSU pricing currently includes a 5% royalty payment to Boeing that has not been finalized. Non-Recurring Pricing The matrix below details the nor-recurring pricing. The TOTAL column shows the total NRE for that unit with “X” marking the units covered by that non-recurring effort. Where individual pricing is required, the price is depicted under the aircraft model, per the Bin Extensions and Interiors.

Non-Recurring MD81-83 MD87 MD90 737 TOTALG2B XG3B XG2D X X XG3C X X XG4 X XG4 Structure X XGalley G5 XCoatroom C1 XC2 X XStowage S1 XStowage S2 XS4 X XFwd Lav $Bin ExtensionsPSU $ Interiors $

MD81-83 MD87 MD90 737 TOTALFleet Total

Fleet DiscountFull SAS2003 Package

NRE includes the following:

• Design • Tooling • Certification (FAA STC) • CMM/IPC


• On-site support • Aircraft Structure Engineering and Certification

Incentives

Estimated Installation Hours The installation matrix below details the estimated elapsed time (start to finish, in hours) for each unit. The number of installers is the recommended number of mechanics (electricians as applicable) to complete the task in that elapsed time.

INSTALLATION # of Installers MD81-83 MD87 MD90 737G2BG3BG2DG3CG4G4 StructureGalley G5Coatroom C1C2Stowage S1Stowage S2S4Fwd LavBin ExtensionsPSUInteriorsHours shown are estimated elapsed time using the recommended "# of Installers"

Terms & Conditions

•


• • •

Warranty

• • •


New Europe Concept Technical Proposal C&D Aerospace has thoroughly reviewed all of the SAS New Europe Specifications and we understand and acknowledge all the requirements as depicted in our airframe specific technical sections, below. Due to C&D’s familiarity with SAS and all of the proposed units (we have in fact previously supplied virtually all of these components to SAS), we have minimized the technical portion of this proposal to a detailed scope of work, specific comments on unique components, weights (located on all drawings), configuration drawings, and general arrangement drawings.


MD80 Technical C&D, as Boeing’s OEM supplier of the MD80 and MD90 interiors, is in the unique position to offer Boeing OEM quality interior components. All components are on each shipset except PSU (3 shipsets total) and include the following: Cabin Items

• Galley G2D, G3C, G4 • Closet C2 • Stowage S4 • Lavatory

Interior Kits

• 3 Shipsets PSU’s • (3) New Outboard Light Panels • New Stowage Compartment (40.03”) • New Stowage Compartment (47.80”) • New Stowage Compartment (A091123-101) • (2) new Double Sidewalls • New 11.4” Sidewall • Sidewall Filler Panel

Please find the following drawing package thoroughly detailing all new components.


MD80 Bin Extensions


MD87 Technical C&D, as Boeing’s OEM supplier of the MD80 and MD90 interiors, is in the unique position to offer Boeing OEM quality interior components. All components are on each shipset and include the following: Cabin Items

• Galley G2D, G3C, G5 • Closet C1

Interior Kits

• (2) New Outboard Light Panel • New Stowage Compartment Assy (48.21”) • New Stowage Compartment Assy (46.21”) • Curtain track

Please find the following drawing package thoroughly detailing all new components.


MD90 Technical C&D, as Boeing’s OEM supplier of the MD90 interiors, is in the unique position to offer Boeing OEM quality interior components. All components are on each shipset and include the following: Cabin Items

• Galley G2D, G3C, G4 • Closet C2 • Stowage S4 • Lavatory

Interior Items

• Bin Extension Kit Interior Components

• New Fwd RH Stowage Compartment (40.03”) • New Fwd LH Stowage Compartment (47.80”) • (2) New Outboard Light Panel • New Aft RH Double Sidewall • New Single Sidewall • (2) Sidewall Filler Panels • Curtain track • New Cold Air Duct STA 320.0 – 275.0 • New Upper Rail and Lower Rail • New Utility Wiring for PSU


B737 Technical

Cabin Items • Galley G2b, G3B • Stowage S1, S2 • Lavatory

Interior Items

• Bin Extension

Please note that C&D does not include the 737 PSU and 737 Interior components (bins and sidewalls) in our technical drawing package. It is our belief that the 737 components can be procured by SAS from Boeing for a lower cost than C&D can supply the identical units. Should SAS wish to divest itself from adding a second supplier for these components, C&D will work with Boeing and SAS to meet SAS requirements.


737 Bin Extensions


ATLANTA AUGUSTA CHARLOTTE DENVER LOS ANGELES NEW YORK RALEIGH SAN DIEGO SAN FRANCISCO

SEATTLE SHANGHAI SILICON VALLEY STOCKHOLM TOKYO WALNUT CREEK WASHINGTON WINSTON-SALEM

Suite 2800, 1100 Peachtree Street NE

Atlanta, GA 30309-4528t 404 815 6500 f 404 815 6555

May 15, 2014

direct dial 404 815 6528 direct fax 404 541 3377

[email protected] VIA E-MAIL & UPS Harry A. Mittleman IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067-4276

Re: B/E Aerospace, Inc. v. Zodiac Aerospace, et al., No. 2:14-cv-00210 (E.D. Tex.)

Dear Mr. Mittleman,

I write in response to your letter of May 5, 2014, which relates to our long-standing request for B/E to dismiss its claims in the above referenced-lawsuit in light of the development, offer to sell, and sale of C&D’s prior art aircraft enclosures. As evidenced by your letter, it is clear that C&D’s own prior art invalidates any possibly relevant claims of B/E’s asserted U.S. Patent No. 8,590,838 (the “‘838 patent”).

The first substantive paragraph of your letter states that this lawsuit involves B/E’s “patented aircraft lavatory invention.” But as you are no doubt aware, the ‘838 patent contains many claims that are not limited to a lavatory, but more generally recite an aircraft enclosure. Please confirm that B/E concedes that C&D’s prior art enclosures invalidate the claims that recite a generic enclosure, and that B/E will not assert any such generic claims in this lawsuit. We remind you of the provisions of 35 U.S.C. §253, which require B/E to file a disclaimer of the claims that recite a generic enclosure.

Your April 15, 2014 letter contains a list of items that B/E claims it needs to assess the invalidity of the ‘838 patent. My April 25, 2014 letter to you enclosed 48 pages of material, such as dated sales proposals with customer names, complete descriptions of C&D’s prior art aircraft enclosures, engineering drawings for the same, and a variety of photographs of the enclosures (including those enclosures installed within an aircraft). Your most recent May 5 letter states incorrectly that we “did not provide all requested information.” I will correct that apparent misunderstanding here.


Harry A. Mittleman May 15, 2014 Page 2

1. Documents sufficient to show that C&D “in fact” manufactured and sold the alleged “S4” storage units, including the dates and locations of such manufacturing and sales, and customers who whom the alleged sales were made.

Your use of the phrase “in fact” implies that you do not believe that there were any actual sales of C&D’s prior art aircraft enclosure. While invalidity based on a prior art system does not require an actual sale but merely an offer for sale (as we have demonstrated to have occurred), there were actual sales of C&D’s prior art aircraft enclosure. For example, the first and second photographs enclosed in my April 25 letter show C&D’s prior art aircraft enclosures installed within an airplane. Additionally, the websites that I referred you to in my April 25 letter contain photographs of C&D’s prior art aircraft enclosures installed on planes (pasted below for convenience).

Photograph 1: http://www.airliners.net/photo/Scandinavian-Airlines--/McDonnell-Douglas-MD-81/0474978/L/&sid=e43cf46a78244a23839de8257d7135eb

Photograph 1 shows C&D’s prior art enclosure unit installed in a McDonnell Douglas MD-81 plane operated by Scandinavian Airlines (“SAS”) the very same airline that received the proposal enclosed in my April 25 letter. The photograph is dated in December of 2003.

Contoured wall of C&D’s prior art aircraft enclosure unit



Photograph 2: http://jetphotos.net/viewphoto.php?id=254712&nseq=75

Photograph 2 shows C&D’s prior art enclosure unit installed in a McDonnell Douglas MD-82 plane operated by Lion Air. The photograph is dated in March of 2004.

2. Documents sufficient to show that “enclosures having the structure of the preceding drawing had flown millions of miles in commercial passenger service prior to B/E’s filing of the applications that led to the ‘838 Patent,” including documents identifying the nature(s) and locations of those structures on aircraft, the model(s) of aircraft allegedly used in “commercial passenger service” and the identity of the aircraft operator(s).

As indicated in the photographs pasted above, C&D’s prior art enclosure units were installed in at least the McDonnell Douglas MD-81 and MD-82 planes. The McDonnell aircrafts were operated by (inter alia) SAS and Lion Air, which placed them in commercial passenger service years before B/E filed its patent application.

Contoured wall of C&D’s prior art aircraft enclosure unit



3. Any evidence that C&D manufactured or sold any aircraft lavatory units that have recessed forward walls in the United States (a) prior to the issuance of the ‘838 patent and (b) subsequent to the issuance of the ‘838 patent.

4. Any evidence that C&D manufactured or sold any aircraft lavatory units that, in addition to those captured in item number 3 above, C&D contends practice the “supposed invention B/E claims in the ‘838 Patent.”

B/E cannot seriously contend that the purpose of providing a contoured wall varies depending on the type of enclosure, especially given that the ‘838 patent itself claims both enclosures in general and lavatories without distinguishing between them. Lacking any difference in purpose, there is no doubt that a contoured wall of a lavatory would be obvious in light of the contoured wall of other aircraft enclosures (as contained in C&D’s enclosure units or those described in U.S. Patent No. 3,738,497 or other prior art at issue in the pending IPR).

Your letter indicates that B/E “strongly disagrees” that C&D’s prior art enclosure invalidates the lavatory claims of the ‘838 patent, but you failed to articulated any reason why it would not have been obvious to a person of ordinary skill in the art as of 2010 to apply the structure of C&D’s prior art enclosures to a lavatory wall. Part of any basis for B/E’s claims in this action include its ability to provide a good-faith and objectively reasonable basis why it would not have been obvious to make this trivial change. Otherwise, B/E will likely be held liable for C&D and the other defendants’ attorneys’ fees and costs under 35 U.S.C. § 285 as interpreted in the recent Highmark and Octane decisions by the Supreme Court, as well as Rule 11 and 28 U.S.C. § 1927. If B/E has any information to provide us on this topic, please do so immediately.

5. Any evidence that supports your contention that “any possibly-relevant claims of the ‘838 Patent are invalid at least based upon C&D’s own activities (in addition to any other relevant prior art),” including a complete description of what C&D’s activities are and how those activities allegedly render the ‘838 Patent invalid, and on which theory of invalidity.

Even B/E apparently recognizes that C&D’s prior art enclosure unit renders at least the generic enclosure claims of the ‘838 patent invalid. As explained herein and in my April 25 letter to you, C&D’s activities included the offer to sell and sale of its enclosure units to at least SAS. Such activities render any possibly relevant claims of the ‘838 patent invalid pursuant to 35 U.S.C. §§102 and 103.

In conclusion, we have met and exceeded each of your requests for information, and B/E cannot avoid any longer answering our demand that B/E immediately dismiss its claims in this lawsuit with prejudice. Please let me know B/E’s response by May 23, 2014.



Sincerely,

/s/ Dean W. Russell Dean W. Russell

cc: C&D Zodiac, Inc. Steven D. Moore, Esq.

US2008 5609219 3


ATLANTA AUGUSTA CHARLOTTE DENVER LOS ANGELES NEW YORK RALEIGH SAN DIEGO SAN FRANCISCO

SEATTLE SHANGHAI SILICON VALLEY STOCKHOLM TOKYO WALNUT CREEK WASHINGTON WINSTON-SALEM

Suite 2800, 1100 Peachtree Street NE

Atlanta, GA 30309-4528t 404 815 6500 f 404 815 6555

June 9, 2014

direct dial 404 815 6528 direct fax 404 541 3377

[email protected] VIA E-MAIL & UPS Harry A. Mittleman IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067-4276

Re: B/E Aerospace, Inc. v. Zodiac Aerospace, et al., No. 2:14-cv-00210 (E.D. Tex.)

Dear Mr. Mittleman,

I write in response to your letter of May 23, 2014, which relates to our long-standing request that B/E dismiss its claims in the above referenced-lawsuit to avoid our clients incurring needless expense. In your most recent letter, you state that B/E will not dismiss its claims because Defendants have not established that C&D’s prior art aircraft enclosure renders U.S. Patent No. 8,590,838 (the “‘838 patent”) invalid or that activities relating to C&D’s prior art enclosure occurred in the United States. We disagree and address both points below, and also provide additional reasons why B/E lacks any good-faith basis to proceed. Like B/E’s baseless preliminary injunction motion, this lawsuit should be withdrawn immediately.

First, you complain that we have not provided evidence that activities relating to C&D’s prior art enclosure occurred in the United States. To the contrary, my April 25, 2014 letter enclosed a sales proposal that establishes sales and marketing of the enclosures did, in fact, occur in the United States. (See, e.g., Aug. 23, 2001 proposal to SAS.) Additionally, in support of Defendants’ motion to transfer, Defendants submitted a sworn declaration establishing that the design, development, sales, and marketing of C&D’s prior art enclosure occurred at C&D’s headquarters in Orange County, California. (Dkt. 33, Decl. of Nabih H. Najd at ¶¶8-13.) There can be no doubt that relevant (invalidating) activities occurred in the United States.

Second, you refer to B/E’s now-withdrawn preliminary injunction motion to support your contention that it would not have been obvious to modify C&D’s prior art enclosure to be a lavatory. It appears that B/E contends in its motion the novel feature of the alleged invention claimed in the ‘838 patent is space-saving. But you have never challenged the fact that C&D’s prior art enclosure would also save space, and your failure to explain why a lavatory that saves space is not obvious proves that B/E has no good-faith basis to argue otherwise.

Moreover, as you are now aware – and as B/E has long been aware – Flight Structures, Inc., now part of B/E, developed a prior art lavatory with a contoured wall in the early 1990s for KLM, which lavatory structure is still being used today. In addition to the drawing we have


Harry A. Mittleman June 9, 2014 provided you, attached are recent photographs of one such lavatory enclosure. At least one inventor of the ‘838 patent was a Flight Structures employee, and one of the developers of this lavatory enclosure – Robert Papke – remains employed by B/E. Despite this, B/E failed to advise the Patent Office of the highly material – and invalidating – KLM lavatory enclosure. We demand that B/E immediately provide us with all documentation relating to any knowledge of the KLM lavatory enclosure by any of the ‘838 patent inventors or anyone else involved in obtaining that patent, and also tell us of any such knowledge not reflected in documentation.

B/E has never articulated any plausible basis for why it believes the ‘838 patent is valid over the significant prior art we have made B/E aware of over the last several months. Rather, B/E has embarked on a reckless course of conduct including: (1) filing a preliminary injunction motion that caused our clients to incur significant expense to analyze and begin preparing a response, (2) refusing our clients any reasonable amount of time to respond to the motion, causing us to have to argue that issue to the Court; and (3) abruptly withdrawing the motion less than three weeks later, while my partner was en route to Texas for the status hearing. B/E’s assertion of the invalid ‘838 patent, and its subsequent flip-flopping on its preliminary injunction motion, render this case an exceptional one in which our clients should be awarded their fees.

We once again call upon B/E to minimize its exposure to our clients’ legal fees and immediately dismiss this case with prejudice.

Sincerely,

/s/ Dean W. Russell Dean W. Russell

cc: C&D Zodiac, Inc. Steven D. Moore, Esq.

US2008 5663767 2
