Civ. Action No. 5:01–CV–1974 (NAM/DEP)
United States District Court, N.D. New York
November 13, 2006
Sidley Austin Law Firm, Edward Poplawski, Esq., Denise McKenzie, Esq., Sandra Fujiyama, Esq., Bryan K. Anderson, Esq., of Counsel, Los Angeles, CA, Cornell University, Office of Counsel, James J. Mingle, Esq., Nelson Roth Esq., Valerie Cross, Esq., of Counsel, Ithaca, NY, for Plaintiffs.
Dla Piper, Rudnick Law Firm, John Allcock, Esq., Licia E. Vaughn, Esq., Stewart M. Brown, Esq., Sean C. Cunningham, Esq., Arthur A. Wellman, Esq., Erin P. Gibson, Esq., of Counsel, San Diego, CA, Fish, Richardson Law Firm, Barry K. Shelton, Esq., John E. Guist, Esq., of Counsel, Austin, TX, Harter, Secrest Law Firm, Jerauld E. Brydges, Esq., of Counsel, Rochester, NY, for Defendant.
DECISION AND ORDER
*1 As the discovery phase in this patent infringement suit, which has been hard fought and required constant court oversight and frequent intervention, winds down and the case progresses toward trial, the parties have presented the court with one final compilation of discovery disputes. Many of the issues now before me are familiar, involving common themes which have pervaded pretrial discovery in the action and in certain instances requiring revisitation of earlier determinations, while others are new to the scene. Based upon the court's intimate familiarity with the case and the voluminous submissions of the parties associated with the various discovery disputes, aided by oral argument conducted to address some of the pending disputes, including on March 6, 2006, and more recently on August 9, 2006, the following rulings are made with regard to the pending matters now before me.
On February 21, 1989 United States Patent No. 4,807,115 (the “′115 Patent”) issued to plaintiff Cornell Research Foundation (“CRF”), as assignee of the named inventor, Dr. Hwa C. Torng. Amended Complaint (Dkt. No. 43) 6. The invention at issue in that patent relates to an instruction issuing system and method for processors with multiple functional units. Id.
In simplistic terms, CRF contends that the methodology described in the ′115 patent allows for the non-sequential processing of instructions, thereby greatly enhancing the speed at which the device in which the processor is located operates.
According to CRF, defendant Hewlett Packard Company (“HP”) has infringed the ′ 115 patent through the manufacture and/or sale of a line of processors, including those marketed by defendant Hewlett–Packard Company (“HP”) as its PA–8000 series.
Amended Complaint (Dkt. No. 43) 9–11. Plaintiffs' complaint also asserts the integration by HP of accused devices into its line of servers and workstations, and therefore seeks to have damages calculated based upon the presence of the processors in those systems, urging application of the entire market value theory of damages.
Amended Complaint (Dkt. No. 43) 11; see generally
TWM Mfg. Co., Inc. v. Dura Corp., 789 F.2d 895, 901 (Fed.Cir.), cert. denied,
479 U.S. 852, 107 S.Ct. 183 (1986). Plaintiffs' complaint alleges direct, inducing and contributory infringement of the ′115 patent, and seeks a variety of relief including a permanent injunction and damages. Id.
In its answer to the amended complaint, HP denies infringement and has asserted various affirmative defenses, including estoppel, laches, inequitable conduct, patent invalidity, and patent exhaustion. Answer (Dkt. No. 47) Affirmative Defenses 1–31. HP has also counterclaimed seeking declaratory relief, including on the issues of non-infringement, patent invalidity, and patent unenforceability. Id.
To place the current, multifaceted discovery dispute in context, it is necessary to understand the nature of HP's business as it relates to the accused products. Implicated in CRF's claim of infringement of the ′115 patent is HP's manufacture, as well as the manufacture for HP's use by other companies, including International Business Machines Corporation (“IBM”), Intel Corporation (“Intel”), and others, of microprocessors, which are also sometimes referred to as central processing units (“CPUs”) or chips. Such processors have many functions and characteristics, among them being the manner in which instructions are ordered and processed—a matter which falls within the purview of the patent at issue. A processor is one of many components comprising a “mother board”, which may be used in various computer hardware, including desktop computers and servers.
*2 As has been noted, many of the accused devices are processors manufactured by HP, primarily though not necessarily exclusively for its use in other products such as HP servers and workstations, while others are produced for HP by other companies, including IBM and Intel.
Based upon an agreement entered into in August of 1997, it appears that Intel is a licensee under the ′115 patent, giving rise to HP's contention that by virtue of its patent exhaustion defense it is shielded from liability with regard to any processors manufactured by Intel and purchased by HP. Whether IBM is similarly licensed by CRF under the ′115 patent is a hotly contested issue.
Plaintiffs commenced this action on December 29, 2001. Dkt. No. 1. Since that time, I have been assigned oversight responsibilities for non-dispositive matters in the case including, importantly, pretrial discovery.
As both sides might agree, discovery in the case has been both arduous and contentious, requiring several lengthy hearings, including an evidentiary hearing conducted in December of 2004 to assist the court in understanding the extent and format of available financial information regarding the net revenues generated by HP's sale of the accused processors and products which include them as components. During the course of discovery the court has issued several discovery-related orders addressing various topics, in addition to persistent, bilateral requests for sanctions, including those listed in the following matrix:
Subpoena issued by plaintiffs to IBM
Damages, including revenues associated with the sale of accused processors and peripherals; agreements between HP and third parties concerning the manufacture of accused products; efforts by HP to block non-party subpoenas issued by plaintiffs to IBM and Intel; claims of privileges associated with non-liability opinions and related documents; technical drawings and schematics; and withholding of drafts of declarations given by HP employees Flynn and Lotz
Certification regarding compliance by the parties with court orders and discovery demands addressing certain specific issues; supplementation of contentions based upon the court's claim construction ruling; privilege regarding disclosure of record of invention; privileged documents associated w/ H. Walter Haeussler; schematics; interrogatory and RFP responses; top five customer information; license agreements; ledgers and budget proposals; and payments to third parties for the manufacture of accused devices
Documents related to opinion letters regarding ′115 patent; slide sets; schematics; pivot tables; top five customers; production of Cornell licensing files regarding ′115 patent; certification of facts supporting plaintiffs' motion for contempt
Reconsideration request by HP relating to 12/9/03 order; financial records and databases including X-press II database; additional certifications of compliance; contracts with outside vendors pertaining to manufacture of PA–8XXX processors; data reflecting revenues for servers and workstations; configuration guides; profit and loss statements; and ICOD (instant capacity on demand) information
Approving plaintiffs' supplemental response to HP interrogatory no. 5
Addressing matters contained in documents related to H. Walter Haeussler, reviewed by the court in camera
(later amended by Dkt. No. 513)
documents submitted by HP in compliance with court's 12/9/03 order
*3 Currently pending before the court is yet another series of discovery disputes based upon each side's contention that its adversary has failed to properly respond to legitimate discovery requests and orders of this court. Common to the positions now taken by the parties is the assertion that with limited exceptions, the court should treat fact discovery as closed and deal with the parties' failures and shortcomings through means other than ordering further compliance, including the issuance of appropriate preclusion orders and the imposition of sanctions.
Analysis of the instant discovery disputes begins with recognition of the indisputable principle that the scope of discovery under the federal rules is significantly broad. Lugosch v. Congel, 218 F.R.D. 41, 45 (N.D.N.Y.2003) (Treece, M.J.). By their express terms, the federal rules allow parties to “obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party[.]” Fed.R.Civ.P. 26(b)(1). Relevancy under Rule 26(b), as amended in 2000, includes “any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case[,]” as framed by the claims and defenses asserted by the parties. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 2389 (1978); Maresco v. Evans Chemetics, Div. of W.R. Grace & Co., 964 F.2d 106, 114 (2d Cir.1992) (citing Oppenheimer Fund
); Eastman Kodak Co. v. Camarata, No. 05–CV–6384, 2006 WL 2728819, at *2 (W.D.N.Y. Sept. 25, 2006) (same); Soto v. ECC Indus ., Inc., No. CV 2005–4764, 2006 WL 2375465, at *1 (E.D.N.Y. Aug. 14, 2006) (same); Kaboggozamusoke v. Rye Town Hilton Motel, No. 05Civ.4029, 2006 WL 2290832, at *1 (S.D.N.Y. Aug. 8, 2006).
Despite this expansive outer boundary of presumptively permissible discovery, a district court is vested with wide discretion in managing the discovery phase of a case. Wills v. Amerada Hess Corp., 379 F.3d 32, 41 (2d Cir.2004), cert. denied,
126 S.Ct. 355 (2005); In re Fitch, Inc., 330 F.3d 104, 108 (2d Cir.2003); Cruden v. Bank of New York, 957 F.2d 961, 972 (2d Cir.1992). The rule governing the scope of discovery itself specifically permits a court to impose limitations on the scope of discovery where, inter alia,
the discovery sought is “unreasonably cumulative or duplicative” or “the burden or expense of the proposed discovery outweighs its likely benefit[.]” Fed.R.Civ.P. 26(b)(2). Even when information or materials sought by a party are otherwise discoverable under the federal rules, “the Court still has considerable discretion to evaluate the practical realities of discovery, balancing the importance of the information against the burdens of production to decide whether fairness does or does not require production, and if so, on what terms.” Jones v. Goord, No. 95 CIV. 8026, 2002 WL 1007614, at *6 (S.D.N.Y. May 16, 2002).
*4 In their several pending motions, the parties have requested various relief available as redress for violations of discovery-related court orders and failure to respond to legitimate discovery devices. Included among the relief sought are the award of sanctions, including costs and attorneys' fees; the issuance of preclusion orders; and certification of facts to Chief District Judge Norman A. Mordue to support a request for a finding of civil contempt. Before addressing the specifics of the parties' motions, I will first outline the standards which I have applied in deciding whether such relief is appropriate.
Rule 37(b) (2) of the Federal Rules of Civil Procedure provides that if a party disobeys a discovery order, “the court in which the action is pending may make such orders in regard to the failure as are just[.]” Rule 37(b)(2) sets forth a broad array of authorized sanctions for the failure of a party to comply with a discovery order, “ranging from the mildest of reimbursing for expenses to the harshest, order of dismissal or default.” LeGrande v. Adecco, 233 F.R.D. 253, 256 n. 1 (N.D.N.Y.2005) (Treece, M.J.) (citing Cine Forty–Second Street Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1066 (2d Cir.1979)). Among the sanctions expressly authorized by Rule 37, in addition to awards of costs and attorneys' fees, are the issuance of orders 1) holding facts to be established; 2) prohibiting the “disobedient party [from] support[ing] or oppos[ing] designated claims or defenses”; 3) striking pleadings; 4) staying proceedings; and 5) designating the failure to comply with the order as contempt. Fed.R.Civ.P. 37(b) (2). This sliding scale list of permissible sanctions is by no means exhaustive, however, and thus does not preclude the imposition of other forms of sanctions that a court deems to be fair under the circumstances. Miltope Corp. v. Hartford Cas. Ins. Co., 163 F.R .D. 191, 194(S.D.N.Y.1995).
In addition to the authority granted under Rule 37(b) to address failures to comply with discovery orders, a federal court possesses the inherent power “to impose respect for its lawful mandates.” LeGrande, 233 F.R.D. at 257 (citing United States v. Seltzer, 227 F.3d 36, 39–42 (2d Cir.2000)). Through its “inherent power to manage [its] own proceedings and to control the conduct of those who may appear before [it],” a court may impose sanctions “[e]ven in the absence of a discovery order[.]” Id. at 258. A court therefore retains wide discretion in imposing sanctions for discovery abuse “[w]hether exercising its inherent power or acting pursuant to Rule 37.” Reilly v. Natwest Markets Group, Inc., 181 F.3d 253, 267 (2d Cir.1999).
The Second Circuit has advocated resort to a cautious, fact-intensive, and case-by-case analysis when determining whether discovery sanctions are warranted; this prescribed approach affords trial judges the flexibility to tailor sanctions “according to the facts and evidentiary posture of each case.” Reilly, 181 F.3d at 267. Factors which a court may consider relevant when deciding whether to impose sanctions include 1) the non-complying party's history of failing to comply with court orders; 2) whether the non-complying party had ample time to respond; 3) the effectiveness of alternative sanctions; 4) whether the disobedient party received a meaningful warning; 5) the prejudice caused to the other party by the disobedient party's failure to comply; and 6) the degree of the party's personal responsibility for failing to comply. LeGrande, 233 F.R.D. at 257 (citing, inter alia,
Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 852–54 (2d Cir.1995)).
*5 Among the sanctions prescribed under Rule 37(b)(2) are the following:
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence[.]
Fed.R.Civ.P. 37(b)(2); see
Residential Funding Corp. v. Degeorge Financial Corp., 306 F.3d 99, 106 (2d Cir.2002); Reilly, 181 F.3d at 268. Both sides to the litigation, though principally the plaintiffs, have urged the court to exercise these available options to remedy their adversaries' allegedly persistent failures to comply with the court's directives regarding discovery.
Under the federal rules, the court is vested with the power to enter a preclusion order when “[a] party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2) ... unless such failure is harmless[.]” Fed.R.Civ.P. 37(c). In determining whether to issue a preclusion sanction, “[c]ourts review the party's explanation for noncompliance, the importance of the testimony or evidence in issue, and the possibility of a continuance.” Barksdale v. Onondaga County Sheriff's Dep't, No. 97–CV–966, 2000 WL 804643, at *2 (N.D.N.Y. June 12, 2000) (Mordue, J.) (citing, inter alia,
Reilly, 181 F.3d at 269). Although the imposition of a preclusion order is within the court's discretion, courts in the Second Circuit have recognized that the sanction is a “drastic remedy” and is generally disfavored. Lore v. City of Syracuse, No. 5:00–CV–1833, 2005 WL 3095506, at *3 (N.D.N.Y. Nov. 17, 2005) (Munson, S.J.) (citations and internal quotations omitted); Barksdale, 2000 WL 804643, at *2 (citing Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir.1991)). Accordingly, this particular form of sanction should be imposed only “in those rare cases where a party's conduct represents flagrant bad faith
and callous disregard
of the Federal Rules of Civil Procedure.” Ward v. Nat'l Geographic Soc'y, No. 99 Civ. 12385, 2002 WL 27777, at *2 (S.D.N.Y. Jan. 11, 2002) (citations and internal quotations omitted) (emphasis in original).
In addition to or in lieu of sanctions, plaintiffs have also sought a civil contempt order and have requested, in aid of that effort, that the court certify facts sufficient to support that claim. Plaintiffs argue that HP's repeated, unabashed flouting of the court's discovery orders warrants the imposition of this harshest of sanctions.
The jurisdictional limitations placed upon United States magistrate judges, when addressing a motion for civil contempt, are derived from 28 U.S.C. § 636(e). Under that statute, “in a case other than one over which the magistrate judge presides with the consent of the parties under 28 U.S.C. § 636(c) [,]” the magistrate judge is not authorized to issue a final contempt order. JSC Foreign Econ. Ass'n Technostroyexport v. Int'l Dev. & Trade Servs.,
No. 03 Civ. 5562, 2006 WL 11481100, at *1 (S.D.N.Y. Apr. 28, 2006); see also
Ceslik v. Miller Ford, Inc., No. 3:04CV2045, 2006 WL 2050928, at *1 (D. Conn. June 20, 2006). Instead, the magistrate judge's function in a “non-consent” case is to certify facts relevant to the issue of civil contempt to the district court. British Int'l Ins. Co. Ltd. v. Seguros La Republica, S.A., No. 90 CIV. 2370, 2001 WL 958975, at *5 (S.D.N.Y. Aug. 22, 2001); Church v. Steller, 35 F.Supp.2d 215, 216–17 (N.D.N.Y.1999) (Homer, M.J.). “The certification of facts under section 636(e) serves to determine whether the moving party can adduce sufficient evidence to establish a prima facie case of contempt.” Church, 35 F.Supp.2d at 217.
*6 In this circuit, the standards to be applied in determining a motion for civil contempt are well-established. Leadsinger v. Cole, No. 05 Civ. 5606, 2006 WL 2266312, at *8 (S.D.N.Y. Aug. 4, 2006). A party may be held in contempt only where “(1) the order the contemnor failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner.” Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 655 (2d Cir.2004).
With these guiding precepts in mind, I will now turn to the merits of the various outstanding discovery disputes, which will be addressed by topic in light of the significant overlap of the various motions now before me.
An issue which has plagued this case and generated several of the many discovery disputes which have arisen along the way pertains to efforts by both sides to obtain documents from each other for the purpose of probing relationships between their adversaries and IBM and Intel, and to obtain discovery from those non-parties.
The latest chapter in that saga is centered upon HP's motion for a protective order excusing it in part from responding to a court approved interrogatory served by the plaintiffs in October of 2005, seeking information related to communications between HP on the one hand, and IBM and/or Intel on the other. HP asserts that such communications, particularly those generated after commencement of this action, are irrelevant to the issues in the case, and further asserts a common legal interest attorney-client privilege and common interest extension of work product immunity protecting certain of those communications from disclosure, based principally upon a cooperation agreement entered into between HP and IBM in connection with this action. Plaintiffs counter by arguing that the disputed communications are critical to the prosecution of their claims and the defenses asserted by HP, bearing upon such issues as patent exhaustion and litigation misconduct. In a motion brought by plaintiffs, in essence representing a mirror image of HP's motion for a protective order relative to its relationships with IBM and Intel, plaintiffs seek sanctions and/or a preclusion order in essence stripping HP of its implied license and patent exhaustion defenses to plaintiffs' claims of infringement.
The genesis of this dispute is an interrogatory, designated as CU/CRF Interrogatory No. 5, which provides as follows:
Reference is made to Hewlett–Packard's contention that damages in this matter will be limited due to the alleged fabrication by Intel and IBM of the PA–8000 processor[s.] Identify all communications, understandings or agreements regarding the ′115 patent, Cornell University, Cornell Research Foundation, any invention of Dr. Hwa C. Torng, any research IBM sponsored at Cornell University, and this litigation made between Hewlett–Packard and IBM; Hewlett–Packard and Intel; Hewlett–Packard, IBM and Intel; and IBM and Intel, including communications, understandings or agreements made by or made on behalf of the aforementioned entities including, but not limited to, communications between outside counsel (e.g.
HP 066712, 11/21/01 email [sic] from Jesse Abzug, in-house IP counsel for IBM, to Rick Schuette in-house counsel for HP, stating “Rick, no new information to report at the present time .”). Hewlett–Packard's response should include without limitation:
*7 (a) the identity of each participant in each communication, understanding or agreement; the date of the communication, understanding or agreement; the substance of each communication, understanding or agreement, and
(b) the identity of each document describing, reflecting or relating to the communication, understanding or agreement.
Exhibits in Support of HP's Motion for a Protective Order (Dkt. No. 484) Exh. A, at 36–37.
Although it is difficult to discern from the text of HP's answer to that interrogatory, which relies in part upon general objections interposed at the outset of its responses announcing, inter alia,
a flat refusal to disclose any post-litigation information, it appears that defendant has drawn a dividing line to correspond with the time of commencement of the action, asserting that any documents generated and communications occurring prior to that time and responsive to this interrogatory have been disclosed, while those post-dating commencement of the action are neither required to be divulged, nor are they even properly the subject of a log listing withheld documents.
As was previously noted, I reviewed and approved CU/CRF Interrogatory No. 5 after it was proposed by the plaintiffs. In doing so, I treated the interrogatory as circumscribed by virtue of its opening sentence, which makes reference to HP's patent exhaustion defense; when approving its issuance, I did not interpret the interrogatory as seeking evidence of litigation misconduct, a subject which plaintiffs now claim is encompassed within the interrogatory—arguing that such evidence is relevant to their potential request for willful damages and/or a declaration that this is an exceptional case, for purposes of awarding attorneys' fees. Examination into the possibility of collaboration between HP and IBM and/or Intel in addressing plaintiffs' discovery demands poses an unnecessary distraction which can serve only to divert the parties' attention away from the truly relevant substantive issues in the case. Consequently, the court will limit any requirement for compliance with this interrogatory to information which may be relevant to HP's patent exhaustion defense.
The primary thrust of court-approved CU/CRF Interrogatory No. 5 is the identification and production of documents which would potentially bear relevance upon the issue of whether IBM and Intel were licensed to the ′115 patent. This is an issue which has been before the court on prior occasions.
Noting that information relevant to the patent exhaustion defense is uniquely within the control of plaintiffs and non-parties Intel and IBM, in drafting its own discovery requests addressing the issue HP seemingly takes the position that it should be permitted to discover any communications regarding the subject between plaintiffs and IBM/Intel, regardless of whether they occurred before or after the filing of suit, whereas a bright line should be drawn at the time of commencement of this action for purposes of responding to plaintiffs' request for similar communications between Intel and IBM on the one hand and HP on the other related to the issue of whether IBM and Intel were licensed under the ′115 patent.
*8 The court has consistently reminded the parties that one of its goals, in carrying out its discovery oversight responsibilities, has been to ensure a level playing field for both sides. HP's posture with respect to this issue is distinctly inconsistent with this philosophy. HP contends, for example, that while its post-litigation communications with IBM are not relevant with respect to the issue of whether IBM is licensed to the ′115 patent, Cornell's post-litigation communications are. The court disagrees, on the theory that what is good for one is good for all. Simply stated, communications occurring between IBM and Cornell subsequent to commencement of suit as to whether IBM was licensed to the ′115 patent are no more or no less germane to the patent exhaustion defense than post-litigation communications to the same effect between HP and IBM, except to the extent that they disclose a license conferred upon IBM during the lifetime of the ′115 patent—an exception which the court will recognize in the relief to be awarded as a result of this portion of its decision.
After carefully considering the matter, I have determined that neither side will be required to disclose, or to list on a privilege log, any post-litigation communications with IBM and Intel, with minor exceptions. Based upon the parties' representations, including in open court at the September 14, 2005 hearing, I will direct a finding, and enter a preclusion order to this effect, that for purposes of the trial in this action it will be established that despite a thorough search neither Cornell Research Foundation, Cornell University, Hewlett Packard Company nor IBM has been able to locate a document specifically denominated as a license agreement between CRF and/or anyone on its behalf and IBM under the ′115 patent. Additionally, I will preclude any party from offering in evidence any document or information regarding the issue of patent exhaustion, implied license, and specifically the question of whether IBM was licensed under the ′115 patent, that has not as of this date been disclosed to the opposing party.
Before leaving this subject I feel compelled to address HP's claim that its fact gathering communications with IBM are privileged. This contention is based principally upon an agreement entered in September of 2003 between IBM and HP, governing the confidentiality of documents and information exchanged between the two parties in the context of this litigation. That document has been submitted to the court by HP for in camera
review. Plaintiffs vehemently argue that the agreement between HP and IBM falls within the scope of my December 9, 2003 order which, among other things, required HP's compliance with CU Interrogatory No. 3, requesting disclosure of any agreements between HP and third parties regarding the ′115 patent. See
12/9/03 Order (Dkt. No. 198) at 36–37, 86–87. According to the plaintiffs, this omission was compounded by HP's certification to the court—well after the execution of the September, 2003 cooperation agreement—representing that it had fully complied with the December 9, 2003 order. Plaintiffs therefore seek sanctions based upon HP's failure to disclose that agreement, asserting that defendant's noncompliance with the court's order warrants the imposition of stern measures.
*9 A review of the court's December 9, 2003 decision reflects that its focus, when addressing CRF Interrogatory No. 7, was upon agreements between the plaintiffs and others that would bear upon HP's patent exhaustion defense. See, e.g.,
12/9/03 Order (Dkt. No. 198) at 34–36. The disputed September, 2003 agreement, on the other hand, does not speak to this issue, but instead purports to govern the confidentiality of documents exchanged between IBM and HP in the context of this action. The court therefore does not regard HP's failure to produce that document as a violation of its December 9, 2003 order, and certainly not a clear enough violation to warrant the imposition of sanctions or a finding of civil contempt. Paramedics Electromedicina Comercial, Ltda., 369 F.3d at 655.
This is not to say that HP's failure to disclose the existence of this agreement, or even to list it on a privilege log, is entirely defensible. Throughout the course of discovery efforts by plaintiffs to seek discovery from third parties, including IBM and Intel, has been contentious, and many accusations have been leveled regarding whether or not HP and those non-party corporations have been cooperating in an effort to thwart attempts by the plaintiffs to seek discovery from them. While the agreement does not directly speak to such cooperation or on its face indicate that the parties agree to collaborate in blocking legitimate discovery by plaintiffs, for the sake of prudence its existence and content should have been disclosed to the court and counsel when discussions regarding those issues were taking place. Finding no legitimate reason for withholding the agreement from discovery, I will make an exception to the ruling otherwise indicated above, limiting discovery to prelitigation communications, and will direct HP to disclose the cooperation agreement to the plaintiffs. Moreover, for the sake of balance, I will direct that plaintiffs similarly produce any agreements which they may have entered into with IBM or others subsequent to commencement of litigation regarding the ′115 patent or the subject of this litigation.
In addition, plaintiffs will be required to produce any license agreements entered into with IBM and/or Intel concerning the ′115 patent, or documents evidencing such agreements regardless of when those agreements were executed.
Before leaving this topic I note that while the plaintiffs have been critical of HP's litigation conduct in this case, plaintiffs do not come before the court with entirely clean hands. With little or no explanation plaintiffs withheld from HP, and did not produce until October of 2005, several documents critical to the issue of whether IBM was licensed to the ′115 patent. As HP notes this failure, together with Cornell's apparent destruction of its copy of the original 1981 IBM research agreement between Cornell and IBM pursuant to its routine document retention policy, underscores the need of HP to engage in legitimate discovery with Intel and IBM addressing those issues. More recently, as pointed out by HP in a letter dated April 17, 2006 (Dkt. No. 600), Cornell belatedly produced highly relevant documents in April of 2006 which should plainly have been produced much earlier in the lawsuit. Those documents include, inter alia,
a second Intel–Cornell agreement entitled “intellectual property agreement”; a listing of expenses associated with the ′115 patent which, plaintiffs previously maintained, did not exist; and a draft document entitled “non-binding draft for discussion purposes only-IBM and Cornell Confidential”, which references IBM's position that it is licensed to the ′115 patent. Also only recently produced by the plaintiffs in April of 2006 were documents dating back to 1997, reflecting Intel's position regarding the ′115 patent. While certainly Intel's position regarding the ′115 patent may not be admissible at trial, such documents nonetheless should have been disclosed by the plaintiffs much earlier in the litigation as relevant or reasonably calculated to lead to discovery of admissible evidence. These shortcomings serve as a counterweight to HP's alleged litigation misconduct, and convince the court that neither party is deserving of an award of sanctions, including costs and attorneys' fees.
*10 Fact discovery in this case is now closed, and thus to some degree the issue of discovery from and relating to non-parties IBM and Intel is now academic. Prior to the close of discovery, issues spawned out of efforts by both sides to seek discovery regarding those non-parties were contentious and hard fought, and both IBM and Intel, when issued subpoenas by the plaintiffs, exercised their rights to resist those subpoenas and have their objections adjudicated in an appropriate forum. The court has exercised much oversight in connection with pretrial discovery in this case, and has carefully scrutinized the parties' submissions in connection with both the most recent round of motions addressing this subject and earlier encounters, and can find no evidence of any sufficient wrongdoing by HP to warrant the extreme sanction of precluding it from offering evidence on what appears to be a viable whole or partial defense to plaintiffs' claims of infringement.
Lore, 2005 WL 3095506, at *3; Barksdale, 2000 WL 804643, at *2. Given the ruling made above, regarding the discovery of communications between the parties and IBM and/or Intel, the court believes that the playing field has been leveled, and thus will not issue any further relief in response to this motion by the plaintiffs.
The court's order of December 9, 2003, which comprehensively addressed a variety of discovery disputes, directed the production of a broad range of financial information related to HP's accused products. See, e.g.,
12/9/03 Order (Dkt. No. 198) at 13–26, 83–84. The issue was again revisited, following the December 16, 2004 evidentiary hearing, conducted to address various lingering matters involving principally those raised in HP's motion for reconsideration, in the court's order dated October 11, 2005, which directed as follows:
HP will be ordered to produce, as they are maintained in the ordinary course of its business, any such quarterly, monthly and/or yearly P & L statements for servers and workstations which do or may potentially contain PA–8000 family processors, and additionally will be required to certify that it has done so.
10/11/05 Order (Dkt. No. 448) at 20–21. Additionally, that order required HP to search for and produce, and to certify that it in fact has done so,
[a]ll monthly, quarterly and yearly profit and loss statements related to servers and workstations which do or may contain PA–8000 family processors, including for the PL61, PL1X and 5X lines, together with any other such financial statements maintained at other intervals.
at 26. That requirement was based upon testimony from Edward Gonzales, a Word-wide Pricing Analyst for HP who apparently was intimately involved in the ongoing production of documents and financial information in the case, and Michael Phelps, a Financial Analyst for the HP Workstation Global Business Unit, both stating that HP maintains, in the ordinary course of its business, quarterly profit and loss (“P & L”) statements for servers, including the PL61, PL1X and PL5X product lines, as well as monthly P & L statements for workstations.
*11 Plaintiffs now challenge HP's claim that it has fully complied with these directives. In their papers, plaintiffs state that HP has produced profit and loss statements for only some select product lines and business groups reporting server, workstation and processor financial information, but not for all relevant product lines. Plaintiffs also argue that recent deposition testimony of HP employees has disclosed additional availability of previously-undisclosed P & L information, including that related to PA-based workstations for a given year, and processor level forecasts. Additionally, plaintiff speculates, based upon the recent deposition testimony of HP employee Gonzales, that P & L statements for an entire line of products which include PA–8000 processors may not have been produced by the defendant.
In response to these arguments HP asserts that it has made a full production of all P & L information sought by plaintiffs, based upon negotiations which ensued following the issuance of the court's October 11, 2005 order. Specifically, HP claims to have produced P & L statements for the PL1X and BCS business units, tailored to meet plaintiffs' selected level of detail, at monthly, quarterly and yearly time intervals and, during the August 9, 2006 hearing, promised to produce P & L information for Code 72, which would reflect warranty and service revenues relating to the accused processors.
HP also states that it has produced all available P & L statements for product lines PL1X, PL5X, PL61 and PL8L for the relevant times.
In ruling upon this portion of plaintiffs' motion, the court is somewhat handicapped in that with the exception of matters raised in their May 2, 2006 letter brief, Dkt. No. 605, and more recently in their proposed findings, Dkt. No. 674, plaintiffs do not explicitly state what P & L information falling within the scope of the court's prior orders exists, as maintained by HP in the ordinary course of its business, but has yet to be produced. The deposition excerpts referenced by the plaintiffs intimate that there may be additional revenue streams associated with the accused processors which would not necessarily be reflected in the P & Ls produced. It is unclear whether, and if so to what extent, some of those revenue streams may be reflected in the 72 product line P & Ls presumably produced in accordance with HP's August 9, 2006 commitment. In any event, the court's order merely required the production of P & Ls, as maintained in the ordinary course of business, related to the accused processors as well as servers and workstations in which those processors were located, and did not speak to the other revenue streams now at issue.
Having reviewed the plaintiffs' arguments, I am not convinced that HP has willfully withheld available P & L information which should have been produced, and that the drastic relief now sought by the plaintiffs is warranted. What was contemplated in the prior orders related to P & L statements was the production of available and existing P & L information relating to accused processors and peripherals in which they were a component; the requirement that HP create such P & L statements from other available information, while perhaps required under other sections of the court's various orders, was not contemplated by the portion of the orders specifically addressing P & L statements. I have carefully reviewed plaintiffs' submissions, including in particular transcript excerpts from depositions of Todd Gustafson and Douglas Wimer, and remain unconvinced that their testimony establishes the existence of available P & L information, maintained at HP in the ordinary course of its business, that has not been provided to the plaintiffs.
*12 While I attribute the court's inability to understand the scope of the P & L inquiry in part to the failure of plaintiffs to identify to the court specifically what information has been demanded but is lacking, I nonetheless share their concern over the question of whether there has been full and complete compliance with this court's order. Consequently, HP will be required to certify to the court that it has complied with the requirements of this court's orders, and specifically the requirements of the October 11, 2005 order, related to P & L statements. That certification shall not be limited based upon any alleged agreement by plaintiffs to accept less than all of the existing P & L information falling within the category of the court's orders, as was the case with regard to HP's certification dated November 30, 2005, and specifically shall not be limited to production of P & L statements for business unit levels for servers, including PL1X and BCS, and a single business unit level for workstations (PL5X).
The question of the extent and nature of financial information maintained by HP regarding the sale of products consisting of or including within them the accused processors has haunted this action. Ever so slowly, with persistent prodding by plaintiffs and the court, a clearer picture has evolved with respect to HP's capabilities in this regard. The matter was addressed in some detail in the court's October 11, 2005 decision. See
10/11/05 Order (Dkt. No. 448) at 15–19. After reviewing the information available to the court, I included within that order the following directive:
I will require HP to produce all ordering and configuration guides for servers, workstations, and any other products potentially containing PA–8000 servers. Thereafter Cornell may, utilizing those guides, compile a list of product numbers which HP will then be required to use in querying the Xpress II database, including any archived information, to determine shipments, orders, sales, and revenues associated with those product numbers, broken down to the greatest extent that the information can be, consistent with any limitations associated with the Xpress II database. In addition, HP will be required to produce all purchase orders reflecting the sale of servers and workstations falling within the listed product numbers.
10/11/05 Order (Dkt. No. 448) at 19.
After producing the required configuration guides and casting upon plaintiffs the burden of going through them and identifying products potentially containing accused processors, HP failed to take the next required steps under the court's directive.
Plaintiffs now argue that despite not seeking reconsideration of the court's order—a procedure with which HP is familiar, having already resorted to it once in this action—and a direct representation to the court that all of the required purchase orders were produced, see
3/6/06 Tr. (Dkt. No. 596) at 95–96, HP has failed to comply, and has instead simply sought to rewrite the court's order, asserting undue burden as the basis for its noncompliance.
HP also argues that in any event it has produced to the plaintiffs in electronic format, including through reports generated by querying the Xpress II database, the electronic equivalent of all of the information which would be disclosed on the disputed purchase orders, and further submits that it has offered to make the archived purchase orders available to the plaintiffs for their inspection, but that plaintiffs have opted not to avail themselves of that opportunity. HP further maintains that it has offered to make its electronic databases available to the plaintiffs for their use in formulating and running queries to determine the information necessary to meet their needs. Both parties have alerted the court, by letters dated April 7, 2006, that in fact HP has not produced sales orders and purchase orders for all systems containing PA–8000 processors, and HP has acknowledged that the representation made to the contrary on March 6, 2006 was in error. See
Dkt. Nos. 597, 598.
*13 Having thoroughly reviewed the parties' submissions and the transcripts of oral argument conducted on March 6, 2006 (Dkt. No. 596), and later on August 9, 2006 (Dkt. No. 678), the court is convinced that while literal compliance with the court's order did not occur, it appears that both parties, following the issuance of that order, took a pragmatic approach, attempting to avoid the extreme burden and expense to both sides associated with producing and reviewing individual sales and purchase orders, for every potentially relevant transaction, instead attempting to obtain the necessary information through electronic databases maintained by HP. Apparently recognizing the monumental impracticality of reviewing each individual sales order implicated, the parties, with the court's approval, entered into a stipulation which limited HP's obligation to produce only sales transaction documents requested by the plaintiffs. See
Stipulation and Order, dated 11/9/05 (Dkt. No. 469) at 2–3. There does not appear to be any dispute that each particular sales transaction document requested by plaintiffs in accordance with that stipulation has been produced. Similarly, it also appears to the court that HP has offered to make the archived purchase orders available for inspection as they are maintained in the ordinary course of business, but that plaintiffs have availed themselves of this opportunity only in the case of select transactions.
The parties' current dispute appears to center upon the level of detail provided by the second level Xpress II query related to particular sales, and the extent of individualized information provided with respect to each transaction. This quarrel, however, is largely the result of plaintiffs' rewriting of the court's prior order. My order contemplated affording plaintiffs full access to all of the sales documents in issue. And, although plaintiffs have rethought the wisdom of the request upon which the order was predicated, the court is not now positioned to intelligently address the current dispute and provide meaningful relief since the original order did not focus on the Xpress II data request now at issue. In short, having abandoned entitlement to full access to all of the transactional documents necessary to evaluate their position regarding damages, plaintiffs cannot now be heard to shift their position and quarrel over the level of Xpress II data provided.
The court therefore declines plaintiffs' invitation to award relief regarding this issue.
Yet another issue which has plagued this case relates to foreign sales. At the heart of the issue is plaintiffs' attempt to gain information regarding accused products which were neither manufactured nor sold in the United States. Such sales are properly excludable for purposes of considering infringement and damages and, as HP correctly notes, for purposes of their claims, it is plaintiffs' burden to identify, as a jurisdictional matter, which of the accused products were manufactured, used, sold, or offered for sale within the United States. See
35 U.S.C. § 271; Petersen Mfg. Co., Inc. v. Adjustable Clamp Co., Inc., No. 92 C 5700, 1993 WL 661468, at *8 (N.D.Ill. Aug. 30, 1993).
*14 The issue of foreign sales has been the subject of several discovery inquiries from the plaintiffs, including two interrogatories requesting specific information regarding foreign sales.
The first of those interrogatories requested the following information:
For each PA–8000 family processor and each product containing a PA–8000 family processor(s) that HP contends there is no infringement liability on the ground that such processor or product was not made, used, offered for sale, or sold within the United States or imported into the United States,
(a) describe the factual basis for such contention (including a specific identification of the fact not performed within the United States),
(b) identify all documents that support such contention, limited to all document upon which HP intends to rely at trial to support such contention per September 26, 2005 Order,
(c) identify persons most knowledgeable about such contention,
(d) provide a chart summarizing the units, revenues, costs, and profits of such processors and products,
(e) provide a detailed description of the methodology employed to segregate the units, revenues and profits associated with the sale of such processors and products from the units, revenues and profits associated with the sale of all PA–8000 family processors and products containing PA–8000 family processors,
(f) provide a detailed breakdown of the computation of revenues and profits and a description of the bases for the computation of revenues and profits,
(g) and provide a chart separately setting forth the following information, (1)each processor or product identified, (2) whether the IRB of such processor or product was made within the United States, (3) the manufacturer of the IRB, processor and/or product, (4) the cost of manufacture of each such processor and product, (5) the location of manufacture, use, offer for sale, or sale of such processor or product, (6) customer, and (7) the gross and net revenue received by HP and gross profit for such processor or product.
Reference is made to HP's partial summary judgment motion related to damages, wherein HP contends that certain accused servers and workstations containing PA–8000 family processors were made or sold outside of the United States. In support of such contention, HP submitted the following statements of material fact which cite to the Declaration of Curt Richards:
“43. For server and workstation sales outside the United States, HP has manufactured servers and workstations outside the United States, and then sold those servers an [sic] workstations outside the United States. For sales of those servers and workstations, the microprocessors (such as the PA–8000 family of processors) are not incorporated into the servers and workstations inside the United States, because the servers and workstations are not manufactured here and never enter here.
*15 44. HP has manufactured servers and workstations outside the United States, and sold them outside the United States, without microprocessors in them. The customer, such as Hitachi, NEC, or Stratus, may then assemble the server or workstation with an HP CPU module or, in rare cases, just the microprocessor. (A CPU module is a microprocessor on a 4X4 board with external SRAM (cache), heat sink, and connectors.) The customer in these instances is generally a reseller, and HP is not involved in how that reseller combines the server or workstation with the HP CPU modules or microprocessors, or if that reseller does so.
45. HP has manufactured some servers and workstations in the United States that incorporate PA–8000 microprocessors, and then shipped and sold those products outside the United States.”
Accordingly, state all facts and identify all documents which support HP's material facts and the statements in 6–8 of Mr. Richards' declaration, identify all persons with knowledge of such facts, and provide a detailed description of the product flow (from unprocessed wafer to finished product (server or workstation)) for each server or workstation containing PA–8000 family processors which HP contends was made or sold outside the United States.”
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 22, at 37–38, 43–44 (internal citations omitted); Exhibits in Support of Plaintiff's Motion to Compel and Sanctions (Dkt. No. 538) Exh. 29 (same).
After seeking and obtaining several extensions of time to answer these interrogatories, HP responded on November 30, 2005 by providing exceedingly nonspecific information and regurgitating several previously disclosed charts. See
Exhibits in Support of Plaintiff's Motion to Compel and Sanctions (Dkt. No. 538) Exh. 29. Those responses, however, failed to contain the information necessary to identify, by number of units, revenues, costs and profits, the accused HP products which were neither manufactured, used, sold, nor offered for sale within the United States.
In an effort to amplify HP's position regarding the issue, plaintiffs served a notice pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure on January 30, 2006, listing foreign sales as one of the issues to be addressed during the deposition. See
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 1. In response to that notice HP produced two witnesses, Edward D. Gonzales and Michael W. Phelps. See
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exhs. 20, 21. Despite testifying that he had undertaken efforts to identify and quantify foreign sales, witness Gonzales did not review his findings in preparation for the deposition.
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 20, at 175–80.
The issue of foreign sales is obviously in play in this case, as evidenced by the fact that one of HP's experts, Robert H. Wallace, utilizing some data which, HP maintains, was derived from Xpress II reports and has previously been shared with plaintiffs, and making certain assumptions, has rendered opinions regarding the issue of foreign sales, under the heading “extraterritorial defense”.
Obviously, the information that would allow a complete, intelligent analysis of this issue is uniquely within the control of HP.
*16 The court has carefully reviewed the parties' submissions regarding the foreign sale issue. From those submissions it appears that reports generated from the Xpress II database include information associated with a field that would identify the country to which the particular product in question was shipped. It also appears this Xpress II data is what was referred to by Mr. Gonzales in his deposition testimony, and which is relied upon by HP's damages expert, Robert H. Wallace, in his report. It is also apparent to the court that these Xpress II reports have been produced to the plaintiffs. While it is probable that additional information that would more clearly define the parameters of any particular transaction in order to allow the parties to discern whether it represents a foreign sale could be gleaned from the pertinent individual sales documents, plaintiffs have decided that despite HP's offer to produce them, the burden of reviewing those documents on a transaction-by-transaction basis is not justified. The court therefore concludes that while along the way HP has been resistant to plaintiff's efforts in this regard, it has now produced, or in certain cases made available to the plaintiffs, the information necessary to address this issue. The court therefore finds that the issuance of the requested preclusion order addressing this issue is not appropriate, and will not award sanctions associated with the question of foreign sales.
Over the first three years of pendency of this suit, HP produced approximately forty-eight boxes of documents and information in response to interrogatories and document requests by the plaintiffs which, it must be acknowledged, were both broad in scope and aggressive in reach. During the twilight of discovery, following issuance of this court's September 26, 2005 and October 11, 2005 orders, by contrast, HP produced to plaintiffs in excess of 180 additional boxes of documents as well as electronically stored information consuming more than thirty-eight gigabytes of electronic storage.
Plaintiffs assert that this represents nothing more than a shoddy litigation tactic, calculated to flood them with information and thereby obfuscate the truly relevant documents, and that this is evidenced by the fact that many highly relevant and non-controversial documents included within the “dump” should have been produced earlier, but were not. HP, in turn, responds that its massive production is a function of the court's orders and the breadth of plaintiffs' various requests, suggesting that the plaintiffs received exactly what they sought.
While recalling that plaintiffs too withheld critical documents from disclosure until near the close of discovery, the litigation tactic employed by HP, in making such an extraordinary voluminous, twelfth hour production, is disturbing. It is not enough to say, as HP has, that plaintiffs got what they asked for and that the sheer volume of materials produced is purely a function of the breadth of plaintiffs' requests. While the court has not reviewed the documents and information comprising the “document dump”, there is good reason to believe—and HP does not argue otherwise—that much of the information is directly responsive to plaintiffs' discovery requests and the court's discovery orders, and as such should have been produced much earlier in the litigation.
*17 While the court agrees with plaintiffs that this type of “document dump” litigation strategy should not be countenanced by plaintiffs, the relief now requested by the plaintiffs, including the preparation of a detailed index of the documents produced, does not seem appropriate, since it appears to place a particularly harsh burden upon HP and to potentially represent an intrusion into the work product of its counsel. To ensure fundamental fairness, however, should plaintiffs desire to reopen fact discovery for the limited purpose of addressing any document or information contained in the materials recently produced by HP but not previously disclosed, they may make application for that relief and the court will look favorably upon any such request for reasonable additional discovery. The court will also encourage the trial judge, in the event of a finding of liability, to consider whether this tactic employed by HP is a factor to be weighed when deciding whether to declare this an exceptional case for purposes of awarding costs and attorneys' fees, should plaintiffs prevail on their infringement claims. See
Realtek Semiconductor Corp. v. Marvell Semiconductor, Inc., No. C–04–4265, 2005 WL 3634617, at *6–*7 (N.D.Cal. Nov. 21, 2005); FMT Corp., Inc. v. Nissei ASB, Co., Civ. A. No. 1:90–CV–786, 1993 WL 588529, at *1–*4 (N.D.Ga. Oct. 4, 1993).
The production of schematics for accused HP processors is another issue which has dogged this litigation throughout its lifetime. Most recently, plaintiffs complain that various schematics previously produced by HP, it turns out, relate to processors which were not shipped to customers, while a revised schematic belatedly produced in October of 2005—more than three years after commencement of the action—in fact relates to the first PA–8000 processor actually shipped to customers. Plaintiffs seek monetary sanctions and/or a preclusion order as a result of this deficiency.
The issue of schematics was addressed in a prior court order, which directed HP to produce all iterations of schematics in an attached representative list of PA–8000 family processors. See
9/26/05 Order (Dkt. No. 446) at 3–4. The court has reviewed the schematics issue and the assertions set forth in the parties' submissions, and finds no reason to revisit the issue. Simply stated, while not condoning belated disclosure of relevant schematics on the part of HP, the court concludes that this is a “non-issue” in light of the parties' apparent negotiated agreements regarding the representative set of schematics to be used for purposes of trial in this action.
Throughout the course of this action plaintiffs have sought, through various means, information regarding the effects of “nullification” on specified dependencies in computer instructions for the accused processors. That information is sought to assist the plaintiffs in probing HP's claim that the instruction reorder buffer (“IRB”), or instruction queue, in its PA–8XXX family processors does not detect or enforce false data dependencies, including write after write (“WAW”) and write after read (“WAR”), instead employing register renaming to eliminate such dependencies from its instructions. Plaintiffs, by way of contrast, contend that nullification introduces false data dependencies that are not handled by the rename registers.
*18 The question of nullification was addressed during a deposition of Manuel Enriquez Banitez, a former HP employee, taken on June 2, 2006. During his deposition, Banitez testified concerning an analysis performed by HP employees regarding conditional nullification. See
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 38. Following that deposition HP reportedly conducted another search of its records and archives for files related to Banitez and programs, finding and producing only one additional document.
On November 16, 2005 plaintiffs served upon HP a notice pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure seeking testimony regarding the issue of nullification. See
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 29. A similar amended notice was served by plaintiffs on January 13, 2006. Id.
Exh. 30. Those notices specified certain subject matters addressing, inter alia,
the issue of nullification. See id.
In response to those notices, HP designated and produced Vasta Santhanan to testify regarding various of the specified subjects, including nullification. In essence, Santhanan testified that he did not perform work with respect to nullification and did not know whether HP's operating system code contained nullification sequences. See, e.g.,
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 37, at 16, 25–28, 33, 49–50, 66–68. When preparing for his deposition, Mr. Santhanan did not review relevant materials identified by former HP employee Banitez during his deposition.
HP has confirmed, both in writing, see, e.g., id.,
Exh. 33, and during oral argument, see
8/9/06 Transcript (Dkt. No. 678) at 51, that corporate wide, it does not know whether there are conditional nullifiable instructions within the compiled codes of its HP–UX operating system. HP maintains, however, that it has provided plaintiffs with the code and necessary decompiler for use in performing their own testing in this regard.
In its motion, plaintiffs challenge defendants' refusal to designate and provide other witnesses in this arena, and contend that if testing is to be performed it should be undertaken by HP, given its familiarity with the code, rather than by the plaintiffs.
Having considered the matter carefully, I am satisfied that HP does not currently possess the information sought. In view of this, HP was under no obligation to perform the requested analysis itself in order to properly prepare a 30(b)(6) witness to testify on the subject matter. Miller v. Pruneda, 236 F.R.D. 277, 282 (N.D.W.Va.2004); Spector Freight Sys., Inc. v. Home Inden. Co., 58 F.R .D. 162, 164–65 (N.D.Ill.1973); La Chemise Lacoste v. Alligator Co., Inc., 60 F.R.D. 164, 171 (D.Del.1973); Riss & Co. v. Association of American Railroads, 23 F.R.D. 211, 211–13 (D.D.C.1959); Konczqakowski v. Paramount Pictures, Inc., 20 F.R.D. 588, 593 (S.D.N.Y.1953); Cinema Amusements v. Loew's, Inc., 7 F.R.D. 318, 321–22 (D.Del.1947). In light of the circumstances presented, and given the burden and expense associated with the required testing, in comparison to the potential relevance of the information sought to the claims in this action, I find that it is the plaintiffs who should bear the burden of undertaking the task of performing that testing, utilizing the code and decompiler supplied by HP as necessary to perform its analysis. To the extent that plaintiffs require additional information from HP in order to perform that exercise, HP must provide such information if it is within its possession, custody, or control and the court will make itself available to assist plaintiffs in that regard. In addition to this relief, I will also direct a finding, in view of defendants' representation to this effect, that “HP does not definitively know whether there are conditionally nullifiable instructions present in HP's compiled operated system code.” Except as to the foregoing, plaintiffs' motion for relief in connection with the issue of nullification, including costs and attorneys' fees, will be denied.
*19 In their motions, both sides to the litigation raise a host of miscellaneous issues addressing perceived deficiencies in responses to discovery requests and court orders. Many of those issues involve matters which, at this late stage in the litigation, are perhaps less pressing and, in many instances, have either been resolved through deposition or submission of expert reports. Having reviewed these additional matters carefully, I have determined that no additional relief is warranted at this juncture, with the following exceptions.
In one of their several motions plaintiffs have requested that Irving Rappaport be provided access to confidential HP information. In that regard plaintiffs complain of HP's refusal to indicate whether it objects to that individual having access to confidential information without being provided with further specifics regarding his background.
The court believes that plaintiffs have supplied the information regarding Irving Rappaport necessary to permit the defendant to determine whether to object to his having access to confidential HP information. The court will therefore direct—to the extent that this has not already been accomplished—that Mr. Rappaport be qualified under the prevailing protective order as a person permissibly designated to receive confidential information.
Plaintiffs also complain of HP's refusal to provide them with access to a consulting agreement entered into between HP and witness John K. Wheeler. Having reviewed the matter, the court will direct that HP produce that document to plaintiff's counsel.
Among the issues raised in HP's motion is plaintiffs' alleged failure to respond to certain interrogatories on a variety of bases, including the allegation that defendant has exceeded the twenty-five interrogatory limit imposed under Rule 33 of the Federal Rules of Civil Procedure as well as the assertion that because HP has not responded to similar interrogatories, the plaintiffs are excused from doing so—a proposition which this court decisively rejects as inconsistent with the governing provisions of the Federal Rules of Civil Procedure and the axiom that two wrongs do not make a right.
Another issue which has been raised, and which remains troubling to the court, is the question of certification regarding the production of Cornell's entire contents of all licensing files relating to the patent in suit. By court order, plaintiffs were directed to produce “all original, nonprivileged documents contained in the licensing files maintained with respect to the ′115 patent for inspection and, if desired, for photocopying at defendant's expense.” 9/26/05 Order (Dkt. No. 446) at 11. Certification that this had occurred was discussed during a subsequently conducted hearing. See
9/1/05 Tr. (Dkt. No. 485) at 37. In their response to this portion of HP's motion plaintiffs assert that they offered to make the original licensing file available for inspection pursuant to the court's order, and subsequently produced documents from that file to HP. They argue, however, that certification that it has provided production of the entire contents of the licensing file was not required by the court's various orders.
*20 Although HP has now apparently been offered access to Cornell's licensing files regarding the ′115 patent, consisting of one or two bankers' boxes worth of documents, and has been provided with copies of at least some of the materials contained within those files, it now desires to review the originals for comparison purposes and to address the legibility issues. HP also requests an explanation from the plaintiffs for their delay in producing the licensing files. In response, plaintiffs submit that the license files were offered to HP for inspection, but rather than choosing to inspect them it instead requested photocopies. Plaintiffs add that to produce the files once again would require segregation of privileged documents.
Having considered the matter carefully and in view of the foregoing I will deny HP's request for access to the licensing files, but will permit HP to identify specific documents which, it contends, are wholly or partially illegible and will require plaintiffs to make those documents available at a mutually agreeable date and time at a place of Cornell's choosing for inspection by HP. In addition I will order the following preclusion, as requested by HP:
Plaintiffs shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to its licensing of, or attempts to license, the ′115 patent or the application that led to the issuance of the ′ 115 that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future they must immediately produce such evidence to HP.
At the heart of this particular motion is a dispute over subpoenas issued by HP to Huei Ling and C.K. Chow, two former employees of IBM. Plaintiffs assert that for the same reasons urged for the court to block further discovery by HP of IBM, those subpoenas similarly should be quashed.
The court has now ruled that both parties may freely seek discovery from IBM and Intel subject to the limitation that, with certain exceptions, it not involve communications between IBM and a party, or a parties' representative, that post-date the filing of this suit. Based upon that ruling, plaintiffs' motion to quash the subpoenas in dispute will be denied.
Throughout this action, plaintiffs have raised the specter of litigation misconduct, in an effort to support a later claim for enhanced damages under 35 U.S.C. § 284, as well as attorneys' fees, based upon a finding of an exceptional case, pursuant to 35 U.S.C. § 285. The claim of entitlement to such relief is based in part upon a meeting between representatives of HP and officials from Cornell, during which defendant's representatives are alleged to have stated, or at a minimum intimated, that the University could expect no further donations or other support from HP until this action was settled. Those events have come to be known, for purposes of this suit, as the “nuclear winter.”
*21 During a conference conducted on February 3, 2006, HP announced its intention to move for a protective order precluding further discovery on the nuclear winter issue. By letter dated February 15, 2006, Dkt. No. 590, however, HP advised the court that it did not plan to move for such a protective order, and it has since confirmed during the hearing conducted on August 9, 2006 that this is no longer an issue requiring the court's intervention. Accordingly, no relief will be granted with regard to the nuclear winter issue.
Another issue raised in plaintiffs' recent motion to compel, but not addressed above, concerns HP's failure to produce license agreements. Plaintiffs' complaint in this regard stems from the fact that while over the course of discovery HP has consistently taken the position that none of its patent licenses are relevant to any issue in the case, and has resisted plaintiffs' efforts to take discovery regarding those licenses and the negotiations leading up to their consummations, it has reversed its field and now claims relevance of those license agreements, including to the determination of damages, yet has failed to permit appropriate discovery concerning them. As appropriate relief, plaintiffs seek a preclusion order barring HP from relying on such licenses for purposes of any damage determination or, alternatively, compelling production of the pertinent licenses as well as a witness to testify concerning the negotiation, execution, and performance with respect to each of those licenses, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. HP counters that it was never ordered to produce license agreements that were not relevant to the claims and defenses in the case, and continues to assert that the disputed HP licenses are in fact not relevant to any issue in the case.
Early on in the discovery phase of the case, HP asserted that it has a variety of “broad cross licenses, in some instances portfolio wide” which, it argued, would not be relevant to any issue including the reasonable royalty calculation. See, e.g.,
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exhs. 24, at 93; 25, at 55; 26, at 32. In what appears to be a clear reversal of positions, HP more recently announced, in a supplemental response to an interrogatory served on May 1, 2006, that certain of its patent licenses would be relevant to a determination of damages. See id.
Exh. 23, at 35–36. In response to further requests by plaintiffs for assurances to this effect, HP has stated that no further information regarding licenses either is relevant or will be produced.
It appears from the parties' submissions that there is little dispute but that in the view of damage experts for both sides, licenses for products other than the accused processors entered into by HP bear little or no relevance to the reasonable royalty equation. By the same token, it would be manifestly unfair to permit HP, including i and timely ts experts, to rely at trial upon licenses that have not been both properlyidentified and for which there has been no discovery. Accordingly, the court will enter an order precluding HP from relying at trial, either directly or through expert opinion testimony, upon any licenses entered into by it for non-accused products for purposes of establishing damages or otherwise.
*22 One of the issues raised during the most recent round of briefing centers upon HP's redaction of certain documents on grounds of relevancy, as opposed to privilege. Those documents are listed in a supplemental privilege log, dated May 26, 2006, as entries 79–103. See
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 46. In response to this request HP, while tacitly acknowledging the only basis for withholding the redacted information is lack of relevance, rather than on the basis of privilege, states that “[t]he redacted portions of these documents contain extremely sensitive, proprietary, and irrelevant competitive information consisting of HP pricing discounts with OEMs on possible future sales [,]” characterizing the information as “competitive dynamite[.]” See
Dkt. No. 635, at 12.
The court has reviewed the unredacted versions of the disputed documents, in camera.
That review confirms that the redactions were made not on the basis of privilege, but rather to preclude disclosure of highly sensitive, commercial proprietary information which is of questionable relevance to the claims in this case. The court, however, is not in a position to fully appreciate the extent of potential relevance of the redacted information, and specifically whether, though perhaps not relevant, the redacted information could lead to the discovery of admissible evidence. Accordingly, as a measure calculated to preserve the sanctity of the confidential information and yet allow the plaintiffs to pursue an argument as to their relevance, I will direct HP to disclose the disputed documents, in unredacted form, to plaintiffs' counsel to be limited to attorneys' eyes (outside counsel) only. In the event that after reviewing the document plaintiffs believe that all or some of the redacted information is highly relevant and should be disseminated to others, subject to the Rule 26(c) confidentiality order in place, leave is granted to plaintiffs to request such relief.
One issue presented by HP's motions, and reiterated in its more recent request for findings limiting evidence at trial, concerns the defense of laches. Implicated in connection with that subject is HP Interrogatory No. 23, which seeks information relevant to that defense, including detailed reasons for failing to sue HP for infringement of the ′115 patent earlier than December of 2001. Despite the fact that plaintiffs have supplemented their response to this interrogatory, HP asserts that even the supplemental response “remains ambiguous in certain key respects.”
The court has reviewed the most recent supplemental response to Interrogatory No. 23, which spans some fifteen pages and provides a great many specifics regarding the reasons for the decision not to sue on the ′115 patent with respect to HP's production of PA–8XXX family of processors prior to December of 2001. Based upon that review, I am satisfied that the answer is adequately specific, and that to the extent it is not and there is additional information which would not be shielded by the attorney-client privilege or attorney work product, HP has had ample opportunity to develop that information through other forms of discovery.
*23 HP's request for an order compelling further supplementation of this interrogatory is therefore denied. The court will, however, enter the preclusion order requested by HP, to the effect that
Plaintiff shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to their decision or their decision-making process as to whether or when to file suit against HP, or in response to HP's defense of laches, that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future, they must immediately produce such evidence to HP.
Another issue raised by the pending motions centers upon HP efforts to obtain information regarding accounts utilized to fund research by the ′115 inventor, Dr. Hwa Torng, between August, 1982 and August, 1983. In their supplemental response to an interrogatory seeking this information, plaintiffs have stated that “[w]ithout waiving [previously interposed] objections, Plaintiff cannot determine from available records the identity of Cornell accounts, if any, Dr. Torng's payment was drawn from for research between August 1982 and August 1983, if any.” HP Exhs. in Support of Motion to Compel (Dkt. No. 632) Exh. E, at 9. Plaintiffs reiterate this position in their opposition to the instant motion.
The response by plaintiffs to this interrogatory is sufficient; plaintiffs cannot be required to produce information which they do not possess. See
La Chemise Lacoste, 60 F.R.D. at 171. To the extent that HP requests “certification” of this fact, such a requirement is unnecessary since the responses are set forth in an interrogatory answer which is given under oath and signed by counsel of record signifying compliance with the standards imposed under Rule 11 of the Federal Rules of Civil Procedure. Defendant's request for an order requiring supplementation of defendant's Interrogatory No. 1 to Cornell University is denied. The court will, however, adopt HP's proposed preclusion provision, as follows:
Plaintiffs shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to the accounts that were used to fund Dr. Torng's research during the period of the alleged invention that led to the ′115 patent, or in response to HP's defense of patent exhaustion, that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future they must immediately produce such evidence to HP.
One of the more prickly issues presented in HP's motions surrounds a patentability evaluation conducted with regard to the ′115 patent by Neil Siegel, the person who prosecuted the ′115 patent before the Patent and Trademark Office (“PTO”). HP contends that while that evaluation may initially have been privileged, a basis for finding waiver resulted from the forwarding of that patentability evaluation to IBM, a third party.
*24 It is true that if the disputed document was indeed sent to IBM, a third party, any claim of privilege was waived with regard to that document, absent a finding that the parties are entitled to invoke a common interest privilege or some other limited exception not applicable here, and the document is therefore properly disclosable in pretrial discovery. Corning Inc. v. SRU Biosystems, LLC, 223 F.R.D. 189, 190–91 (D.Del.2004); Union Carbide Corp. v. Dow Chemical Co., 619 F.Supp. 1036, 1050 (D.Del.1985). The burden of establishing such a waiver, it should be noted, rests with Cornell as the party asserting the privilege. Lugosch v. Congel, No. Civ. 1:00–CV–784, 2006 WL 931687, at *12–*13 (N.D.N.Y. Mar. 7, 2006) (Treece, M.J.) (citing In re Horowitz, 482 F.2d 72, 82 (2d Cir.), cert. denied,
414 U.S. 867, 94 S.Ct. 64 (1973).
In this instance it appears likely that the disputed document was in fact sent to IBM. HP contends that the document was transmitted in a letter dated May 3, 1983 from Sophie F. Capolongo, a person identified by the title “Patents Administrator”, to an individual at IBM. See
HP's Exhibits in Support of Further Letter Briefing (Dkt. No. 611) Exh. S. That letter indicates that enclosed with it were copies of Dr. Torng's invention disclosure and “an evaluation of the disclosure made by Neil Siegel and another paper by Professor Torng providing additional information relative to the invention.” Id.
The letter goes on to state that “[i]t is Mr. Siegel's opinion that this additional information together with the earlier disclosure, will form a sufficient basis for preparation of a patent application.” Id.
It is true that the Capolongo letter does not specifically reference, by date and exact title, the Siegel evaluation. It is fairly evident, however, that the documents referred to in the letter, and in HP's motion, are one and the same. Accordingly, I find that the privilege with respect to the Siegel evaluation has been waived, and will order it disclosed by the plaintiffs.
One of the documents addressed in HP's letter motion is a position paper, in the form of a slide presentation, setting forth Intel's position regarding the ′115 patent. According to the plaintiffs, that document was prepared by Intel in 1997, during the course of settlement negotiations between it and the plaintiffs regarding potential infringement claims under the patent. While continuing to maintain that the document is not relevant to the claims or defenses in the case, plaintiffs have produced it out of an abundance of caution, and based upon the requirement that it certify to the production of all non-privileged documents related to licensing of the ′115 patent.
The court concurs with HP that the Intel position paper should have been produced sooner during the course of pretrial discovery. The court also agrees, however, with plaintiffs' assessment that the document is in all likelihood not admissible at trial, and of only minimal relevance to the claims and defenses of the case. The court will therefore not award any relief regarding this particular request.
*25 HP also complains of the recent production by plaintiffs of an intellectual property agreement, dated September 16, 1997, which is generic and thus not specific to the ′115 patent. Also at issue are documents relative to negotiations of that agreement and a previously-produced patent license agreement. In response to the argument that the challenged documents should have been produced earlier, plaintiffs respond that the documents do not relate to licensing under the ′115 patent, and point to the position previously espoused by HP, to the effect that similar broad cross-licenses are irrelevant and therefore need not be produced.
Having reviewed the matter carefully, including the requested agreement, I agree with the plaintiffs' position and specifically note that HP has continuously taken the position that broad cross-licenses which are not specific to the ′115 patent are not relevant to any issues in the case. Defendant's request for relief regarding those documents will be denied as an attempt to obtain from the plaintiffs what HP itself has refused to disclose.
Defendant also complains of the late production of a December, 1997 press release regarding an acknowledgment by Intel of the contributions by the ′115 inventor, Dr. Hwa C. Torng, to improving high speed instruction decoding and execution technology. Plaintiff responds that although the document was among those produced recently, it was also produced on January 7, 2003, prior to Dr. Torng's deposition held on August 23, 2003. On this basis, defendant's request for relief regarding this document will be denied.
Defendant maintains that plaintiffs have not fully listed various expenses relative to the ′115 patent. Based upon plaintiffs' response to this portion of HP's motion, however, it appears that through document production and a response to court approved Interrogatory No. 29, plaintiffs have disclosed all patent prosecution costs up to the date of the issuance of the patent. The court agrees with plaintiff's assertion that any indication of post-patent issuance costs is irrelevant to any issue in the case including, pertinently, the reasonable royalty analysis as informed by the factors articulated in Georgia–Pacific Corp. v. U.S. Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y.1970).
This particular dispute centers around a draft, one page document exchanged during the course of discussions between IBM and Cornell held in November of 2004 and July of 2005. That document contains statements to the effect both that Cornell does not acknowledge that IBM is licensed under the ′115 patent, and that IBM maintains it is in fact licensed to the ′115 patent pursuant to the terms of the 1981 and 1984 research agreements. While the disputed document should have been produced earlier, its contents should have come as no surprise to HP, including based upon information developed through other sources including, notably, e-mail communications previously disclosed and statements of Nelson E. Roth, Esq., a participant in those discussions with IBM on behalf of Cornell. Simply stated, all that the document establishes is that IBM believes that 1981 and 1984 agreements confer a license on IBM regarding the ′ 115 patent, while Cornell argues that it does not. The court views this as old news, rather than a shocking new development in the case.
*26 HP next challenges the alleged withholding by plaintiffs of documents which exist and are relevant to the claims and defenses in the case, but have not yet been produced. In addition to matters falling within this category which have already been addressed, this portion of HP's motion addresses an article from IP Strategy Today,
co-authored by Cornell General Counsel James Mingle, Esq., and other similar information.
Plaintiff responds that the version of the article appearing in IP Strategy Today
is contained within files which were produced to HP on November 30, 2005, and that Attorney Mingle was questioned at some length regarding that article at his deposition. Given these circumstances, no relief will be awarded with regard to this matter.
HP also complains of plaintiffs' failure to produce CRF Board of Directors meeting minutes. Responding to this portion of HP's motion, plaintiffs correctly note that the court's September 26, 2005 order did not require such production, rejecting a broad HP proposal which would have encompassed such minutes. 9/26/05 Order (Dkt. No. 446) at 15–16. To the extent that any such minutes of CRF board meetings reflect, among CRF holdings, a value attributed to the ′115 patent and the rights thereunder, those documents must be produced.
One of the issues of concern to HP regarding CRF board minutes is the question of authority and the part of Thomas Rogers to enter into agreements on behalf of CRF. Speaking to this issue, plaintiffs have stated that an exhaustive review of the minutes of Cornell University's Board of Trustees did not yield any indication of authority on the part of Mr. Rogers, or the person in the position held by him, to sign documents such as the 1981 and 1984 research agreements. The court accepts this representation, and declines to award any relief with regard to the subject to CRF board meeting minutes.
To be sure, discovery in this case has been arduous, and HP's compliance with discovery plaintiffs' requests and positions taken in the case have been checkered, and to some degree contradictory.
At least a significant portion of the blame, however, lies in the breadth and vagueness of discovery requests posited by the plaintiffs. Many of the discovery disputes with which I have been confronted could have been avoided had each side, and particularly the plaintiffs, recognized that the best way for a litigant to ensure that it receives that which it has requested during discovery, and be comfortable in knowing that all documents and information sought have been produced, is to tailor its requests in such a way that they are pointed, crystal clear, and not overbroad.
Now that fact discovery in this action is closed, the court is relegated to determining whether discovery has been fundamentally fair and whether it has evenhandedly applied the governing rules to both sides. The foregoing represents an effort to do just that and to ensure, through the issuance of appropriate preclusion orders and discovery related findings, that neither party is significantly disadvantaged by the other's recalcitrance in responding to legitimate discovery requests. Accordingly, it is hereby ORDERED as follows:
*27 1) The court hereby makes the following FINDINGS, which shall be binding and preclusive upon the parties during the trial of this action, subject to approval of the assigned trial judge:
a) It is established that despite a thorough search, neither Cornell Research Foundation, Cornell University, Hewlett Packard Company, nor IBM has been able to locate a document specifically denominated as a license agreement between CRF, or anyone else legally authorized to confer such rights, and IBM under the ′115 patent.
b) It is established that HP does not definitively know whether there are conditionally nullifiable instructions present in HP's compiled operating system code.
2) The following evidentiary PRECLUSIONS shall apply in connection with the trial of this action, subject to the approval of the assigned trial judge.
a) No party may offer into evidence any document or information regarding the issues of patent exhaustion and implied license, and specifically the question of whether IBM was licensed under the ′115 patent, that was not disclosed to the opposing party on or before November 13, 2006.
b) HP shall be precluded from relying at trial, either directly or non-directly, including though not limited to through opinions of its experts, upon any licenses entered into by it for non-accused products, for purposes of establishing damages or otherwise.
c) Plaintiffs shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to their decision or their decisionmaking process as to whether or when to file suit against HP, or in response to HP's defense of laches, that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future, they must immediately produce such evidence to HP.
d) Plaintiffs shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to its licensing of, or attempts to license, the ′115 patent or the application that led to the issuance of the ′ 115 patent that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future they must immediately produce such evidence to HP.
e) Plaintiffs shall not affirmatively offer at trial any documentary, testimonial, or other evidence related to the accounts that were used to fund Dr. Torng's research during the period of the alleged invention that led to the ′115 patent, or in response to HP's defense of patent exhaustion, that was not provided to HP before August 9, 2006. If plaintiffs become aware of any such evidence in the future they must immediately produce such evidence to HP.
3) Within ten (10) days of the date of this order the parties shall make the following CERTIFICATIONS to the court:
a) HP shall be required to certify that it has fully complied with the requirements of the court's October 11, 2005 order, Dkt. No. 448, by producing, as they are maintained in the ordinary course of its business, all quarterly, monthly and/or yearly P & L statements for servers and workstations which do or may potentially contain PA–8000 family processors covering the relevant period.
*28 b) Plaintiffs shall certify that they have conducted a reasonable search and have produced all documents related to the licensing of the ′115 patent that are non-privileged. To the extent that any such documents have been withheld on the basis of privilege, the certification shall state that those documents have been properly listed and identified on an appropriate privilege log.
4) Within ten (10) days of the date of this order defendant shall produce to plaintiffs the cooperation agreement entered into in September of 2003 with IBM addressing pretrial discovery and exchange of information in this action, and shall additionally disclose any similar agreements with any other parties including though not limited to Intel Corporation.
5) Plaintiffs shall, within ten (10) days of the date of this order, disclose to the defendants any agreements entered into between any nonparty, including though not limited to IBM and Intel, addressing cooperation in this case and/or governing the exchange of documents in connection with the action.
6) Within ten (10) days of the date of this order plaintiffs shall produce to defendants any previously non-disclosed license agreements entered into with IBM and/or Intel concerning the ′115 patent, as well as any documents evidencing such agreements, regardless whether those agreements were executed prior to or after commencement of this action.
7) The court determines that Irving Rappaport is qualified under the protective order previously issued in this case as a person permissibly designated to receive confidential information, subject to the terms and conditions of that protective order.
8) Within ten (10) days of the date of this order HP shall produce to the plaintiffs all consulting agreements entered into between it and witness John K. Wheeler.
9) HP's request for an order requiring plaintiffs to produce the entire contents of all licensing files relative to the ′115 patent for inspection is GRANTED in part, in that HP may identify specific documents which, it maintains, are wholly or partially illegible, and plaintiffs shall make the originals of those documents so identified available for inspection at a mutually convenient date, time and place. Except to this extent, HP's request for further access to the plaintiffs' ′115 licensing files is DENIED.
10) Plaintiffs' request for findings related to nullification is DENIED, except as indicated above, the court finding that HP has satisfied its discovery obligations with regard to this issue.
11) Plaintiffs' motion for an order quashing subpoenas issued by HP to Huie Ling and C.K. Chow is DENIED.
12) Within ten (10) days of the date of this order defendant shall produce to plaintiffs the documents referenced in entry nos. 79–103 of the May 26, 2006 supplemental privilege log. Those documents shall be available only to plaintiffs' outside counsel, for attorneys' eyes only, unless otherwise ordered by the court, and the close of litigation shall be destroyed or returned to HP's counsel, at HP's option.
*29 13) Defendant's request for an order requiring plaintiffs to serve a further, supplemental response to defendant's interrogatory no. 23 is DENIED.
14) Defendant's request for an order requiring supplementation by plaintiffs of responses to defendant's interrogatory no. 1 to Cornell University is DENIED.
15) With ten (10) days of the date of this order plaintiff shall produce to HP the patentability evaluation conducted with regard to the ′115 patent by Neal Siegel, Esq. In the event plaintiffs cannot locate that document within their possession, custody or control, they shall certify that fact to the court within the same ten (10) day period.
16) Within ten (10) days of the date of this order plaintiff shall produce to defendant any minutes of CRF board meetings which reflect any value attributed to the ′115 patents and any license rights thereunder.
17) The stay of production of documents pursuant to subpoenas issued to IBM and Intel (11/30/05 Dkt. Minute Entry) is VACATED.
18) The parties' requests for award of costs and attorneys' fees incurred in connection with their various motions are DENIED.
19) All pending requests for discovery-related relief not addressed above are DENIED.
The processors which are identified by CRF as potentially infringing include those marketed by HP under various model labels, including PA–8000 (Onyx), PA–8200 (Vulcan), PA–8500 (Cuda), PA–8600 (Landshark), PA–8700 (Piranha or Payara), PA–8800, and PA 8900 (Short Fin). See
Amended Complaint (Dkt. No. 43) 9–10. Throughout this proceeding the parties have referred to these accused devices collectively as the “PA–8000 family of processors”, or the “PA–8XXX processors,” and I will do likewise.
Over time, HP has equivocated as to the extent of its sale of PA–8xxx processors standing alone, as distinguished from the sale of peripherals which include, as a component, an accused device. In response to a direct question from the court early on in the case, one of HP's attorneys represented that the defendant is not in the business of selling processors, but instead its processors are sold as parts of servers and workstations. 5/14/03 Tr. (Dkt. No. 115) at 46–47. This contention is reiterated in various HP filings. See, e.g.,
Exhibits in Support of Plaintiffs' Motion to Compel (Dkt. No. 628) Exh. 27, at 7–8 (9/10/04 HP submission stating “HP is overwhelmingly not in the business of selling microprocessors.... most PA–8XXX processors are sold within servers”). More recently, however, in an expert report disclosed to the court HP represented that of approximately eleven billion dollars of revenue associated with the accused processors, six billion was generated through sales of stand alone processor sales.
During one of several discovery-related hearings, defendant's counsel advised that HP may manufacture processors for use by other companies, although such safes comprise a relatively small segment of the company's processor business. 5/14/03 Tr. (Dkt. No. 115) at 47–48.
Currently before the court, and addressed in this motion, are HP's motions for a protective order, filed on 12/2/05 and 12/5/05 (Dkt. Nos.479, 482); plaintiffs' motion for a preclusion order/costs/to compel, filed on 12/19/05 (Dkt. No. 489); plaintiffs' motions for sanctions and/or contempt, filed on 1/9/06 (Dkt. No. 535); HP's motion to compel, filed on 1/6/06 (Dkt. No. 542); plaintiffs' motion regarding subpoenas to former IBM employees Huie Ling and C.K. Chow, filed on 2/13/06 (Dkt. No. 580); plaintiffs' motion to compel discovery, filed on 6/12/06 (Dkt. No. 627); HP's motion to compel discovery, filed on 6/12/06 (Dkt. No. 631); HP's letter motion to compel, filed on 5/2/06 (Dkt. No. 605); HP's letter motion to compel, filed on 4/17/06 (Dkt. No. 599); and plaintiffs' letter motion to compel, filed on 5/2/06 (Dkt. No. 607). This decision will also address proposed discovery-related findings recently submitted by the plaintiffs (Dkt. No. 674) and HP (Dkt. No. 673).
Ordinarily, when addressing the issue of one party seeking to discover whether the other has obtained information from a non-party, I would invoke a general rule that “if evidence is equally available to both parties, the party seeking the information should do its own research.” 8A C. Wright & A. Miller, Federal Practice and Procedure § 2174, at 552 & n. 93 (1970 & Supp.1988), as quoted in In re Greene, 103 B.R. 83, 90 (S.D.N.Y.1989), aff'd,
904 F.2d 34 (2d Cir.1990), cert. denied sub nom.
Greene v. Balaber–Strauss, 498 U.S. 1067, 111 S.Ct. 784 (1991). I am not inclined to do so in this instance, however, in light of the lengths to which IBM and Intel have gone to resist such discovery efforts by the parties, particularly the plaintiffs.
In their motion plaintiffs also sought to block efforts by HP to take further discovery from Intel, based upon its failure to obtain court leave under Rule 30(a)(2)(B) of the Federal Rules of Civil Procedure to take a second deposition of a person already deposed. While this many no longer present a live controversy, I note that plaintiff's reliance upon that rule is misplaced, since it does not preclude the taking of a second deposition from a corporation or other similar entity, as opposed to a single person. Cf.
Quality Aero Technology, Inc. v. Telemetrie Elektronik GmbH, 212 F.R.D.313, 319 (E.D.N.C.2002). Moreover, the court questions whether plaintiffs have standing to interpose this objection, which properly belongs to Intel, as the subpoenaed party.
Plaintiff's motion also implicates CU Interrogatory No. 3, which sought information regarding any understanding or agreement between HP and any third party related to the ′115 patent. A document entitled “Defendant Hewlett–Packard Company's Certification Regarding Compliance With The Court's December 9, 2003 Discovery Order” was filed with the court on June 10, 2004. See, e.g.,
Exhibits in Support of Plaintiffs' Motion for a Protective Order (Dkt. No. 490) Exh. 9. In that filing, inter alia,
HP certified that it had fully responded to CU Interrogatory No. 3. See id.,
During a discovery hearing conducted on September 14, 2005, for example, HP pressed its quest for information related to communications between plaintiffs and IBM and Intel regarding that issue. See, e.g.,
9/14/05 Tr. (Dkt. No. 530) at 111–14.
In light of my ruling on this motion, it is unnecessary to enter the thicket and address the complex issues of work product and common interest privilege raised by HP in its motion. The court doubts, however, that statements made by IBM, a third party with relevant information, to counsel for HP would be shielded by the work product doctrine. See
Veliotis v. Nawrocki, No. 3:98 CV 225, 1998 WL 1661398, at *4 (D.Conn. Dec. 9, 1998). The court also notes that it is questionable whether under the circumstances now presented, HP can meet the test for establishing either a joint defense privilege or a common interest privilege. See generally
Lugosch v. Congel, 219 F.R.D. 220, 234–39 (N.D.N.Y.2003) (Treece, M.J.); Gulf Islands Leasing, Inc. v. Bombardier Capital, Inc., 215 F.R.D. 466, 470–71 (S.D.N.Y.2003). Those doctrines are narrowly construed, particularly since they run counter to the overarching notion that one of the hallmarks of our system of justice is that the goal of promoting full disclosure best serves the interest of justice by ensuring that all relevant information is both disclosed and presented when a dispute is before a court for resolution. Lugosch, 219 F.R.D. at 234; Gulf Islands Leasing, Inc., 215 F.R.D. at 471; Nat'l Ed. Training Group, Inc. v. Skillsoft Corp., No. M8–85, 1999 WL 378337, at *3 (S.D.N.Y. June 10, 1999); see also
Spectrum Sys. Int'l Corp. v. Chemical Bank, 78 N.Y.2d 371, 376–77, 581 N.E.2d 1055, 1059, 575 N.Y.S.2d 809, 813 (1991) (applying New York law regarding attorney-client privilege).
According to HP's submissions, roughly 72% of the accused processors issued in this case were manufactured by IBM and Intel. The striking of this defense would therefore have a momentous impact upon the plaintiffs' claim for damages, should they prevail at trial on their infringement claims.
HP readily acknowledges that it has collaborated with IBM and Intel in connection with the responses by those parties to discovery efforts by plaintiffs. Such efforts may well have been furthered by the close business relationships between HP and those entities. The prospect that HP may
have encouraged IBM and Intel to resist legitimate discovery requests plaintiffs propounded pursuant, inter alia,
to Rule 45 of the Federal Rules of Civil Procedure is somewhat disturbing. Nonetheless, given the availability of alternative courses of action for enforcing subpoenas issued to those parties—however ineffective they may have proven with regard to IBM—and the lack of any evidence squarely disclosing misconduct on the part of HP, the court is not positioned to enter effective and appropriate relief addressing plaintiffs' suspicions in this regard. I note that nothing in this opinion should be construed as condoning the practice of a party joining forces with a non-party in an effort to block legitimate discovery in a case.
The production of P & L information relating to the PL1X and BCS units apparently occurred, in electronic format, on November 4 and November 10, 2005.
A certification to this effect was made orally by defendant's counsel. See
8/9/06 Tr. (Dkt. No. 678) at 69.
That order was modified by subsequent, stipulated order dated November 9, 2005 providing, in pertinent part, that
[f]or each sale or shipment for which Plaintiffs request production of the sales transaction documents pursuant to the Discovery Orders, Defendant shall produce such documents within seven (7) business days after Plaintiffs have identified such sale(s) and/or shipment(s). If the bulk of sales/shipments information requested by Plaintiffs make completion of production of the sales transactions documents unfeasible within the 7–day period, the parties shall negotiate in good faith an additional period of time for Defendant to complete such production.
Stipulation and Order, dated 11/9/05 (Dkt. No. 469) at 2–3.
Plaintiffs' review of the contents of approximately thirty-four boxes of ordering and configuration guides reportedly revealed only about 360 unique stock keeping units (“SKUs”), or product numbers, corresponding to accused products. According to the plaintiffs, and notwithstanding hearing testimony suggesting to the contrary, it now appears that HP may all along have possessed the ability to generate that same list of accused SKUs electronically.
Having reviewed the parties' submissions it is clear to the court that at least some of the difficulties associated with compliance with this court's October 11, 2005 order, related to Xpress II data, stems from a breakdown in communications and the failure of the parties to meaningfully negotiate over the manner of meeting its requirements.
As part of their argument regarding prejudice which they have suffered, plaintiffs cite the fact that two of HP's trial experts, John F. Osterndorf and Robert H. Vallace, will, they argue, rely upon the type of transactional data which has been withheld by HP from production. HP has represented to the court that when opining regarding damages, its experts have relied on the very same Xpress II data that has been provided to plaintiffs. See
8/9/06 Transcript (Dkt. No. 678) at 69–70. I have reviewed the reports of those two experts, which were produced for my review in the context of settlement negotiations, and do not find it readily apparent that those individuals will utilize information not provided to the plaintiffs during discovery to support their opinions at trial. Obviously, to the extent that information, including individual transaction documents, is to be relied on by HP, either directly in evidence at trial or indirectly, such information must have been disclosed to the plaintiffs prior to the date of this order.
HP's counsel has stated that this issue implicates only servers and workstations, since HP apparently concedes that virtually all of its processors were shipped into and out of Puerto Rico, thus eliminating the ability to claim a foreign sale exemption for stand alone sales of processors. See
8/9/06 Transcript (Dkt. No. 678) at 75–76. A review of a report prepared by HP's damages expert, Robert H. Wallace, however, suggests that HP may now contend otherwise, Wallace having extrapolated from plaintiffs' SKU designations and seemingly assumed that a significant number of accused HP processors were shipped offshore, and thus are properly excludable for purposes of any damage calculation.
Those two interrogatories were among several discovery requests proposed to and approved by the court. See 9/26/05 Order (Dkt. No. 446) at 14.
Both of those witnesses testified during the December 6, 2004 evidentiary hearing held to address matters regarding HP's financial records capabilities.
At one point HP suggested that the efforts of Gonzales to collect information regarding foreign sales were protected as work product. The court rejects the notion that Gonzales, having been offered as a Rule 30(b)(6) witness, is excused from proper preparation as the company's designee to address a topic identified in the deposition notice by virtue of the work product doctrine. See
Wilson v. Lakner, 228 F.R.D. 524, 528–29 (D.Md.2005); Security Ins. Co. v. Trustmark Ins. Co., 218 F.R.D. 29, 33–34 (D.Conn.2003); In re Vitamins Antitrust Litig., 216 F.R.D. 168, 172 (D.D.C.2003). This is true even though the fact gathering at issue may have been conducted at the directive of defendant's counsel. Sec. Ins. Co., 218 F.R.D. at 33–34.
HP's counsel has acknowledged that even when considering the case of a processor contained within a peripheral shipped offshore, the issue is less than clear as to whether the fact that the processor was manufactured in the United States transposes the entire transaction into a domestic sale. See
8/9/06 Tr. (Dkt. No. 678) at 75–76.
According to the plaintiffs, this equates to more than nine million pages of information in hard copy format.
The fact that this may no longer be an area of significant controversy is strongly suggested by virtue of plaintiffs' failure to include this among the topics addressed in their May 2, 2006 letter brief (Dkt. No. 605) and proposed findings related to outstanding discovery motions (Dkt. No. 674).
HP's compiler team is located in Bangalore, India. That team apparently continues to search records on site at that location for further analyses identified by the plaintiffs in their motion, and has located one additional document which was produced on June 30, 2006 concerning the issue.
After offering to produce the code to plaintiffs in February of 2006, without response, HP voluntarily produced it of its own initiative on May 15, 2006. A subsequent request by plaintiffs for a disassembler from HP to assist in applying the compiled code was honored by HP.
One of the issues raised by HP in the latest round of briefing is a request for permission to share confidential information concerning the litigation with representatives of IBM. It should be noted that this request was previously made by HP, and rejected by the court. See
10/21/04 Order (Dkt. No. 326) at 21. I have not been presented with any arguments which would warrant that I revisit that determination.
In light of this ruling the court's earlier stay of the production of documents pursuant to subpoenas issued to IBM and Intel (11/30/05 Dkt. Minute Entry) is vacated.
It appears, based upon statements made at the August hearing, that the parties have taken all of the discovery desired with respect to this issue.
Because of their obvious relevance to the claims in the case, HP has been required to produce any documents that may contain agreements or patent license terms with IBM and Intel that specifically address the PA–8000 family processors.
Plaintiffs have addressed this issue in their most recent request for findings related to outstanding discovery issues. See
Dkt. No. 674, at 17–19.
In a communication subsequently received from HP and accompanying the material submitted for in camera
inspection, counsel clarified that entries 101 and 103 should not have been included on the privilege log, since the documents corresponding to these listings were produced in full, without redaction.
HP has expressed skepticism that this is the case, citing deposition testimony given by Cornell witness Richard C. Cahoon, allegedly to the contrary. The cited testimony of witness Cahoon, however, is at best equivocal on this issue.
Plaintiffs appear to assert that the Neil Siegel evaluation is not included within any files within the possession, custody or control of the plaintiffs. If that is the case, plaintiffs will be required to certify to that effect.
A prime example of this concerns the question of whether HP sells processors. See
p. 4, n. 2 ante.
End of Document.