*1 Plaintiffs and Counter-defendants Toyo Tire & Rubber Co., Ltd. and Toyo Tire U.S.A. Corp. (collectively, “Toyo”) moves for an order compelling further discovery materials and responses from Defendant CIA Wheel Group (“CIA”). Specifically, Toyo seeks an order compelling CIA to: (a) make its computer systems available for a computer forensics inspection; (b) produce its invoices reflecting sales of AMP M/T tires without any other redactions; (c) produce all profit and loss statements and balance sheets; (d) provide a privilege log; and (e) re-produce certain documents as separate files instead of a single, merged PDF document.

The Court will address each of Toyo's requests in turn:

The Court endorses the view that “the best solution in the entire area of electronic discovery is cooperation among counsel.”[1] The Court's first response to any discovery motion related to electronic discovery issue is to induce the parties, through whatever means are necessary, to engage in such cooperation.

Toyo's discovery requests include several RFPs that would include e-mails. Toyo tells the Court that it is concerned about the adequacy of CIA's effort to collect responsive e-mails because (1) the volume of e-mails produced has been small and (2) of the e-mails produced, all of them appear to have been produced from the e-mail account of one CIA employee, Paul Yang. JS at 8.

CIA responds by explaining that its e-mail servers crashed before the lawsuit was filed but that its principal went through individual computers to identify and collect responsive e-mails. JS at 17. Thus, CIA assures the Court, “[a]ll responsive emails ... have been produced,” id., and Toyo's request for a forensic evaluation is “meritless,” id. at 18.

The Court finds CIA's response inadequate. CIA tells the Court next to nothing about what was searched and what search terms were performed. Furthermore, the Court does not share CIA's belief that Toyo must take a deposition to identify shortcomings in CIA's methods. At a minimum, parties must share some information about the protocol used to ensure that responsive documents are collected and produced. See generally Apple, Inc. v. Samsung Elecs. Co., No. 12-0630, 2013 WL 1942163, at *3 (N.D. Cal. May 9, 2013) (noting that “transparency and collaboration is essential to meaningful, cost-effective discovery”). It does not appear to the Court that counsel have meaningfully conferred about e-mail custodians, keyword searches, and other fundamentals of ensuring that all responsive e-mails have been produced.

Although the Court is not inclined to order a forensic inspection of CIA's computer systems at this time, CIA is ordered to identify its search terms and custodians within two business days of this order. Simultaneously, Toyo will provide CIA with a list of proposed search terms and custodians. Once those search terms and custodians are produced, the parties shall meet and confer to discuss Toyo's proposed search terms, CIA's search terms, and possible e-mail custodians. Should the parties be unable to reach an agreement on the search terms and e-mail custodians, they shall appear on Thursday, March 3, 2016, at 9:00 a.m., for a further hearing on this issue.

*2 CIA explains that its sales records are kept in an electronic database rather than any physical form. CIA has produced an Excel spreadsheet exported from that database containing the “raw data” from 19,000 entries in its database about CIA's sales of allegedly infringing tires, e.g., “tires sold, amount, to whom, etc.” Dkt. 71-6 at 3. Toyo complains that this “summary chart” does not contain customer name and contact information, instead providing a “customer code.” JS at 10. Toyo seeks an order permitting it to inspect and copy the raw data.

Pursuant to Rule 34(b)(2)(E)(ii), “a party must produce [electronically stored information] in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.” Id. The advisory committee's comments to the 2006 amendment further clarify the obligations of a responding party:

Fed. R. Civ. P. 34 advisory committee's note (2006) (emphasis added).

It appears clear that CIA did not produce its sales records in the form in which they are ordinarily maintained. The question then is whether they were produced in a fashion that satisfies Rule 34's standard of a reasonably usable form. The parties do not directly address this standard, and neither party provides the Court with an excerpt from CIA's Excel spreadsheet.

Separately, the Court agrees with Toyo that CIA may not redact otherwise responsive documents because those documents contain irrelevant material. See Bonnell v. Carnival Corp., No. 13-22265, 2014 WL 10979823, at *4 (S.D. Fla. Jan. 31, 2014) (concluding that the “better, less-risky approach” is not to allow parties “the carte blanche right to willy-nilly redact information from otherwise responsive documents in the absence of privilege, merely because the producing party concludes on its own that some words, phrases, or paragraphs are somehow not relevant”); Evon v. Law Offices of Sidney Mickell, No. 09-0760, 2010 WL 455476, at *2 (E.D. Cal. Feb. 3, 2010) (“[A] party should not take it upon him, her or itself to decide unilaterally what context is necessary for the non-redacted part disclosed, and what might be useless to the case. It should not come as a shock to those involved in litigation, that parties may see the outcome differently.”). To the extent CIA has done so, and it is unclear from the parties' submissions that it has, it is ordered to reproduce unredacted versions within twenty-one (21) days of this order. Of course, such documents may be produced under the terms of the parties' protective order.

Based upon the parties' further comments at oral argument, the parties are ordered to meet and confer further about CIA's production of the data from its financial database by no later than Wednesday, March 2, 2016. Should the parties be unable to reach an agreement on CIA's production, they shall appear on Thursday, March 3, 2016, at 9:00 a.m., for a further hearing on this issue.

Toyo seeks company-wide profit and loss statements (“P&Ls”) and balance sheets for all years in which CIA has sold the allegedly infringing tires. CIA has refused to produce company-wide P&Ls and balance sheets, arguing that Toyo's remedy for trade dress infringement is limited to its actual damages or CIA's profits, which are calculated by subtracting the production costs of the infringing product from sales revenues. See JS at 21. CIA tells the Court that its document production provides this information: “Plaintiff knows how much Defendant paid for the tires and how much it sold them for as those documents have been produced.” Id. Thus, CIA contends, its company-wide P&Ls and balance sheet are irrelevant.

*3 But CIA recognizes that it may someday want to contend that its profits should include indirect costs. See JS at 21. CIA argues that “even that does not require full balance sheets and P&Ls.” Id. In short, the Court disagrees. Toyo is entitled to examine records such as company-wide balance sheets and P&Ls that will provide information about CIA's indirect cost centers. Moreover, any claim that this information is “proprietary” can be addressed by production under the parties' protective order, which includes an Attorney's Eyes Only provision. See Dkt. 35. CIA's objections to RFP Nos. 32 and 33 are accordingly overruled and CIA is ordered to produce all responsive documents within twenty-one (21) days of this order.

The parties have been unable to agree on how privilege logs should be handled. In the absence of such an agreement, the parties are generally ordered to comply with Fed. R. Civ. P. 26(b)(5)(A)(ii)'s requirements for any documents withheld on the basis of privilege. If the parties agree to exclude privileged communications dated after the litigation commenced, they are free to do so. Nor will the Court upset Rule 26's provisions about testifying experts.

Toyo complains about the form of CIA's production of materials, arguing that CIA has not produced documents consistent with Rule 34(b)(2)(E)(i)'s requirement that documents be produced “as they are kept in the usual course of business.” The Court does not view CIA's response as even contending that it has met this requirement. See JS at 17. CIA is ordered to re-produce all responsive documents as they are kept in the usual course of business within thirty (30) days of this order.

Toyo's motion is GRANTED in part and DENIED in part as set forth above. The parties shall inform the Court's courtroom deputy clerk by 4:00 p.m. on Wednesday, March 2, 2016, whether a hearing will be necessary on the issues identified above, and whether the parties intend to appear in person or by telephone. If search terms and custodians remain disputed, each side is ordered to e-mail a list of proposed search terms and custodians to the Court's chambers e-mail address before any hearing.

Each side to bear its own attorney's fees and costs. See Fed. R. Civ. P. 37(a)(5)(C).

On January 28, 2016, this Court held a hearing on CIA's motion to compel Toyo to produce documents responsive to CIA's RFP No. 64, which sought production of “[a]ll patent applications [Toyo has] filed on tire tread, whether in the U.S. or elsewhere.” At the hearing, the Court discussed with the parties its tentative ruling and gave the parties an opportunity to discuss further RFP No. 64 “in light of the Court's determination that (1) Toyo's patents and patent applications on tire tread are relevant to Toyo's trade-dress claim; and (2) proportionality does not require an outright denial of CIA's motion.” The Court ordered the parties submit a joint status report about their further discussions by February 12, 2016. The parties have done so. See Dkt. 85.

Toyo's portion of the joint status report is effectively an effort to persuade the Court to depart from its tentative. Toyo submits far more detailed information about the burdens that producing responsive information would impose on its intellectual property department to persuade the Court that principles of proportionality requires denying CIA's motion. Id. at 2-4. Furthermore, Toyo also argues that CIA argued that its tire design was ornamental when securing a design patent and is now estopped from arguing that Toyo's trade dress is functional. Id. at 4-6. Toyo makes no showing about why these arguments were not included in either the parties' joint stipulation or its supplemental memorandum.

*4 The Court rejects Toyo's position on both counts. The Court agrees with CIA that the lengthy review process identified by Toyo's employee is neither necessary nor warranted. The Court therefore rejects Toyo's new proportionality concerns. Likewise, the Court is not persuaded that Toyo's new estoppel argument warrants a finding that Toyo's patents and patent applications are irrelevant.

This leaves the Court in an unsatisfying position. Having asked the parties to discuss further possible compromises about RFP No. 64, one side has essentially refused, preferring instead to re-argue the motion. Asking the parties to confer further is not an acceptable solution to the Court. CIA's motion has been pending for over two months, and it began the meet and confer process about RFP No. 64 almost four months ago.

Accordingly, CIA's motion to compel is GRANTED. Toyo is ORDERED to produce all of its patent applications on tire tread in the U.S. and elsewhere within thirty (30) days of this order.

Effective immediately, the parties (including any Defendants not involved in these disputes) are ordered to obtain leave of this Court before filing any future discovery motion under Federal Rules 26-37. Such leave of Court may be obtained through the auspices of the Court's Informal Telephonic Conference procedure, the details of which are set forth on the Court's Procedures and Schedule page of the Court's website. Once the parties have engaged in a pre-filing conference of counsel as required by Local Rule 37-1, the parties should discuss making arrangements for such an informal telephonic conference to raise any future dispute.

William A. Gross Const. Associates, Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134, 136 (S.D.N.Y. 2009).