Civil No: 04 CV 1992 B (JFS)
United States District Court, S.D. California
Filed August 09, 2005
Kent M. Walker, Cooley Godward Kronish, San Diego, CA, Nathan K. Cummings, Pro Hac Vice, Cooley Godward Kronish LLP, Reston, VA, for Plaintiff/Counter-Defendant.
Alexas D. Skucas, Allison H. Altersohn, Robert F. Perry, King and Spalding, New York, NY, Hilda C. Galvan, Keith B. Davis, Mark C. Howland, Mark N. Reither, Jones Day, Dallas, TX, Kenneth R. Adamo, Jones Day, Cleveland, OH, Michael Ira Neil, Neil Dymott Frank Harrison and McFall, San Diego, CA, Michael J. Newton, The Law Offices of Michael J. Newton, Flower Mound, TX, for Defendants/Counter-Claimant.
ORDER (1) GRANTING IN PART AND DENYING IN PART KYOCERA'S MOTION TO COMPEL NOKIA TO PRODUCE DOCUMENTS IN RESPONSE TO KYOCERA'S SECOND SET OF REQUESTS FOR PRODUCTION [58-1]; (2) GRANTING IN PART AND DENYING IN PART KYOCERA'S MOTION TO COMPEL NOKIA TO ANSWER KYOCERA'S FIRST AND SECOND SETS OF INTERROGATORIES [58-2]; AND (3) GRANTING NOKIA'S MOTION TO COMPEL KYOCERA TO RESPOND TO NOKIA'S FIRST SET OF REQUESTS FOR PRODUCTION AND FIRST SET OF INTERROGATORIES [76-1]
*1 Plaintiff Kyocera International, Inc. (“KII”) moves this Court to order Nokia, Inc. (“Nokia”) to produce documents and answers in response to KII's second set of requests for the production of documents and KII's first and second sets of interrogatories. Nokia objects to KII's requests on the grounds that the documents and answers are not relevant to the suit. Similarly, Nokia moves this Court to order KII to provide all relevant documents in response to Nokia's first set of requests for production and first set of interrogatories. KII objects to the requests on the basis of lack of control over the requested information. The parties met and conferred in good faith regarding the motions, but were unable to come to any agreement. Oral argument was heard by the undersigned on July 28, 2005.
II. KII'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND ANSWERS TO INTERROGATORIES
In refusing to produce many of KII's requested documents and responses to interrogatories, Nokia argues that such requests are not relevant because KII cannot link its discovery requests to specific language from the patent claims, and the requested information has no bearing on the specific claims of patent infringement. KII argues the requested information is relevant because even though the discovery requests do not explicitly cite to a claim term, they sufficiently relate to the design, function and purpose of the patents, and are likely to lead to the discovery of admissible evidence regarding claims of patent infringement and invalidity.
A party is entitled to obtain discovery of “any matter, not privileged, that is relevant to the claim or defense of any party.” FED. R. CIV. PROC. 26(b)(1). On a showing of good cause, a “court may order discovery of any matter relevant to the subject matter involved in the action.” Id. Discoverable information need not be admissible at trial, but must “appear[ ] reasonably calculated to lead to the discovery of admissible evidence.” Id. The relevance standard is more broad for discovery than for trial, and any doubts regarding relevance should be resolved in favor of permitting the discovery. Heat & Control, Inc. v. Hester Industries, Inc., 785 F.2d 1017, 1024 (Fed. Cir. 1986). Particularly in patent cases, when considering an accused infringer's “activity in the design and development” of a patent, such information is relevant and thus discoverable. Id.
B. '105 Patent: Built-in Antenna
The '105 patent claims relate to the way an antenna is mounted within a portable phone. See Walker Decl., Ex. A (“'105 Abstract”). The spacing between the antenna and circuit board relates to the way in which the antenna is mounted within the phone. Id. Requests relating to the '105 patent seek the following information within several accused Nokia mobile phone model numbers, as follows; (1) Request for Production No. 25 requests “ALL DOCUMENTS AND THINGS RELATING TO interference between any antenna and circuit board;” (2) Request for Production No. 30 requests “ALL DOCUMENTS AND THINGS RELATING TO the deterioration or increase in gain as a result of the antenna design or size;” and (3) Request for Production No. 31 requests “ALL DOCUMENTS AND THINGS RELATING TO the resonance ranges.”
*2 In the moving papers and in oral argument, KII argued that the requests under the '105 patent are relevant because they relate to the design and development of the accused products. Given the standard stated in Heat & Control, 785 F.2d 1017, the Court finds that design and development information is relevant, for discovery purposes, to KII's infringement case. Here, KII has requested design information of several accused phones as they relate to Request for Production No. 25 regarding electrical interference, Request for Production No. 30 regarding increasing and deteriorating gain, and Request for Production No. 31 regarding resonance. For discovery purposes, the design information requested is potentially relevant to demonstrating infringement of the '105 patent, and therefore the Court GRANTS KII's instant request, and orders Nokia to produce the items requested in Requests for Production Nos. 25, 30 and 31 subject to the Protective Order.
C. '018 Patent: Contact Information
The '018 patent relates to a mobile phone's address book capabilities to store, display and search for personal contact information. See Walker Decl., Ex. B (“'018 Abstract”). The patent claims include the manner in which contact and image information are associated to yield a usable configuration. Id. The requests relating to the '018 patent includes Request for Production No. 34, which seeks “ALL DOCUMENTS AND THINGS RELATING TO storing CONTACT INFORMATION” within several accused Nokia mobile phone model numbers.
KII seeks documents regarding software testing and verification or software incident reports that relate to the phone book features of the accused products, and argues that such documents are relevant because they may show that Nokia tested and addressed issues associated with phone book features by using the design features of the patent-at-issue in the accused products. The Court is satisfied that KII has adequately demonstrated that documents relating to software testing and verification of the contact information storage capabilities of the accused phones are relevant to allegations relating to the '018 patent. Therefore, the Court GRANTS IN PART KII's instant request and orders Nokia to produce the software testing and verification documents relating to the contact information storage capabilities of the accused phones.
D. '820 Patent: Power-Saving Function
The '820 patent relates to the power-saving function for a portable phone. See Walker Decl., Ex. C (“'820 Abstract”). The patent deals with the mobile phone's ability to switch between modes of operation in an effort to save power. Id. Requests regarding the '820 patent seek the following information within several accused Nokia mobile phone model numbers: (1) Request for Production No. 54 requests “ALL DOCUMENTS AND THINGS RELATING TO PROCESSORS capable of switching between modes of operation;” (2) Request for Production No. 56 requests “ALL DOCUMENTS AND THINGS RELATING TO each mode of operation of each PROCESSOR used;” and (3) Request for Production No. 58 requests “ALL DOCUMENTS AND THINGS RELATING TO each mode of operation.”
KII argues the requests relating to the '820 patent are relevant because documents explaining the manner in which the power-saving function is achieved and implemented relate to the design of the power-saving function in the accused devices. KII asserts that testing and verification specifications and software incident reports may lead to admissible evidence on this subject. The Court finds that software testing and verification documents pertaining to the design and operation of the several accused phones, explaining how the power-saving function is achieved and implemented, are relevant to KII's claims of infringement of the '820 patent. Therefore, the Court GRANTS IN PART KII's instant request and orders Nokia to produce only the software testing and verification documents relating to the power-saving function of the accused phones, as stated in Request for Production Nos. 54, 56 and 58.
E. Non-Patent Specific Requests
1. Request for Production No. 80
*3 Request for Production No. 80 requests “ALL bills of materials RELATING TO the ACCUSED DEVICES (specifically including those bills of materials that list the electronic components used in the ACCUSED DEVICES).” KII argues that many of the components described in the bills of materials relate directly to the claims of the '105 patent and likely the '018 and '820 patents, and therefore are relevant to KII's infringement claims. Nokia argues that KII already has the information it seeks because Nokia produced its service manuals that include a detailed list of all the components used in Nokia's phones. Because Nokia states it has produced for KII the series 40 and series 60 codes in the service manual, the Court DENIES KII's request to produce the bills of materials for the accused devices. However, because KII states it is not aware of which series applies to which of the accused phones, Nokia shall, in a supplemental response, identify which series goes to which phone in the service manual.
2. Request for Production No. 81
Request for Production No. 81 requests “ALL DOCUMENTS AND THINGS RELATING TO the methods and processes used to manufacture any of the ACCUSED DEVICES.” The Court finds that this request is overly broad, and notes that in oral argument KII offered to narrow the request. Therefore, the Court DENIES KII's request without prejudice, and order KII and Nokia to meet and confer to discuss production of what has already been produced, and if what Nokia has already produced is insufficient, directs KII to narrow its request to identify specific components and particular parts of the manufacturing process.
F. Requests for Source Code
KII seeks software source code that details software functions such as phone books and sleep mode control in each phone, and hardware design language source code that determines the functions of integrated circuit chips, including the power-saving sleep modes. The specific source code requests include: (1) Request for Production No. 23 requests source code, documents and things to demonstrate how the operation of the accused products relate to the patents-in-suit; (2) Request for Production No. 43 requests program code relating to the display of contact information within several accused Nokia mobile phone models; and (3) Interrogatory No. 15 seeks identification of the source code that relates to the phone book capabilities for each accused device. KII asserts that this information is relevant to determining infringement of the '018 and '820 patents.
Nokia asserts that it has produced all relevant source code that has been used for its phones that were sold since October 4, 2004, when KII filed the instant suit. Nokia has converted this code from its native format to a .tif file so that it could Bates stamp the source code prior to production. Nokia has expressed concern that in its native format, the confidentiality of this highly proprietary information could too easily be inadvertently compromised.
KII requests that the source code be produced as it is “kept in the usual course of business,” i.e., as simple text files (e.g., ASCII text files) rather than Bates-labeled .tif images, because it can be examined much more easily by an expert witness when in the native format.
Having considered the parties' arguments, the Court DENIES WITHOUT PREJUDICE KII's request to receive the source code in native format. The Court orders Nokia, as it so stated at oral argument, to produce the source code in .pdf format. If KII, however, can demonstrate a practical inability in using the .pdf format for searching or accessing the information within the document, then KII may arrange to view the source code in native format at Nokia's counsel's office, as discussed in note 1 below, or, renew its motion to receive production of the source code information in native format.
1. Interrogatory No. 1 (and No. 3 relating to invalidity)
*4 KII requested that Nokia, in the form of a claim chart, set forth the factual and legal bases for each of Nokia's denials, affirmative defenses and counterclaims that Nokia has not and does not actively or contributorily infringe any valid claim of the patents-in-suit. In response, Nokia provided answers that KII asserts are improper because (1) they do not address each claim limitation in the asserted patents for each of the accused products; and (2) are only “generalized conclusions in narrative form.” Pl.'s Mem. P&A at 11. Nokia states that KII initially contended that only claim 1 of each of the patents-in-suit was subject to infringement, but that on June 17, 2005 (two days prior to the filing of this motion), KII supplemented its infringement contentions to identify eleven (11) additional patent claims. Nokia states that it will provide invalidity contentions for those additional claims.
The Court finds that the narrative response Nokia has provided thus far is inadequate because it does not appear to demonstrate claims of non-infringement as to particular phones for the specific patent claims. Therefore, the Court GRANTS KII's instant request and orders Nokia to identify that each of the accused phoned does not infringe by the absence of specific elements of each of the claims asserted in the patents-in-suit. To the extent that KII hereafter provides more substantive information to Nokia regarding its specific claims of infringement, Nokia may further supplement its responses to Interrogatory Nos. 1 and 3. Though the Court notes that it is likely easier to provide and review this information in the form of a claim chart, Nokia is entitled to produce its responses in either narrative form or within a claim chart.
KII's Interrogatory No. 11 asks Nokia to identify the general architecture of the accused phones, and more specifically, whether they have a single chipset or multiple chipsets for specific functions, and how those chipsets relate to each other. KII asserts that because the functions use significant power, many are likely to have a power-saving “sleep mode,” which is relevant to determining infringement of the '820 patent.
At oral argument, Nokia stated that it has provided the chipset information in the service manuals that it already produced. Therefore, the Court DENIES KII's instant request, but orders Nokia to provide a supplemental response stating that the documents in response to Interrogatory No. 11 have already been provided, and identify which chipsets were used by which phones to perform the specific functions described.
3. Interrogatory Nos. 12, 13, 14, 15, 16
Interrogatory No. 12 seeks identification of each oscillator device used in each accused device. Interrogatory No. 13 seeks identification of each hardware component and corresponding source code for each accused device. Interrogatory No. 14 seeks identification of the source code that relates to the controlling of each oscillator device identified in Nokia's response to Interrogatory No. 12. Interrogatory No. 15 seeks identification of the source code that relates to the phone-book capabilities for each accused device. Interrogatory No. 16 seeks identification of the source code that relates to image compression and/or decompression for each accused device.
Notwithstanding its objections, Nokia responded to Interrogatory Nos. 12-16 by stating that pursuant to Federal Rule of Civil Procedure 33(d)
, the documents Nokia produced in response to KIL's Request for Production No. 23
respond to this interrogatory. For reasons discussed above, KII asserts that Nokia's response to Request for Production No. 23 is insufficient, and that in two of the responses at issue, Nokia identified Bates ranges of nearly 14,000 pages, which was an insufficient identification of where the information may be found. Walker Decl., Ex. P. at 22-24.
*5 Pursuant to Rule 33(d), because KII is now in possession of the source code,
it appears that KII is in a substantially similar position as Nokia in terms of ability to identify the requested information. Therefore, the Court DENIES KII's request. However, to the extent it is possible, Nokia and KII should meet and confer and attempt to narrow the universe of responsive documents.
III. NOKIA'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND ANSWERS TO INTERROGATORIES
On January 31, 2005, Nokia served its First Set of Requests for Production and First Set of Interrogatories on KII. KII has failed to produce the requested discovery, stating that it lacks control over the responsive documents and information in the possession of its parent company Kyocera Corporation Japan (“KCJ”) and subsidiary Kyocera Wireless Corporation (“KWC”). Nokia argues that KCJ and KII share the same legal interests, as KCJ licensed all the patents-in-suit to KII on September 1, 2004
for a limited term, and the patents will revert back to KCJ at the conclusion of that term. Cha Decl., Ex. T. Further, Nokia alleges that KCJ, KII and KWC enjoy a close relationship, as demonstrated by the coordinated defenses and claims presented in both the instant action and the related Texas actions.
KII argues that it is a corporate entity separate and distinct from KCJ and KWC, and the fact that KCJ assigned the patents-in-suit to KII has no relevancy to KII's ability to produce information solely in the possession, control or custody of either KCJ or KWC.
A party may serve a discovery request on another party to produce information “in the possession, custody or control of the party upon whom the request is served.” Fed. R. Civ. Proc. 34(a). “Control is defined as the legal right to obtain documents upon demand.” U.S. v. Int'l Union of Petrol. and Indus. Workers, 870 F.2d 1450, 1452 (9th Cir. 1989) (citing Searock v. Stripling, 736 F.2d 650, 653 (11th Cir. 1984)). Thus, a party asked to produce documents pursuant to Rule 34 must “seek that information reasonably available to [it] from [its] employees, agents, or others subject to [its] control.’ ” Comcast of L.A., Inc. v. Top End Int'l, No. CV 03-2213, 2003 U.S. Dist. LEXIS 18640, at *13 (C.D. Cal. July 8, 2003) (quoting Gray v. Faulkner, 148 F.R.D. 220, 223 (N.D. Ind. 1992)). The party requesting the discovery bears the burden to prove that the opposing party has control over the information. Int'l Union, 870 F.2d at 1452.
B. Responsive Documents and Information in the Possession of KCJ
The “legal right” to obtain documents upon demand, which constitutes control, is generally created by statute, affiliation or employment. In re Legato Sys., Inc., 204 F.R.D. 167, 170 (N.D. Cal. 2001) (citations omitted). The core concern about whether a party is deemed to have control over the information centers around ‘ “the relationship between the party and the person or entity having actual possession of the document.’ ” Clark v. Vega Wholesale, 181 F.R.D. 470, 472 (D. Nev. 1998) (quoting Estate of Young v. Holmes, 134 F.R.D. 291, 294 (D. Nev. 1991)). Where the relationship concerns whether a subsidiary has the requisite control over a parent corporation to obtain information from the parent for discovery, courts consider “the degree of ownership and control exercised by the parent over the subsidiary, a showing that the two entities operate[ ] as one, demonstrated access to documents in the ordinary course of business, and an agency relationship.” Camden Iron & Metal, Inc. v. Marubeni America Corp., 138 F.R.D. 438, 442 (D.N.J. 1991); see Choice-Intersil Microsystems, Inc. v. Agere Sys., 224 F.R.D. 471, 472-473 (N.D. Cal. 2004) (finding a subsidiary had access and control of information possessed by the parent corporation where the subsidiary was wholly-owned by the parent, the companies shared databases and the subsidiary has already obtained sensitive documents from the parent).
*6 It appears to the Court that KII has a “legal right” to obtain documents from KCJ based on the two companies' affiliation. First, KCJ has 100% control over KII, as KII is its wholly-owned subsidiary. Cha Decl., Ex. L at 1. Both companies appear to operate in close coordination as KII serves as the holding company for KCJ's North American business units. Id. KII has already offered KCJ's employee-inventors for depositions in the United States, thus demonstrating its ability to access information from KCJ. KII also appears to act of KCJ's agent in North America, because KII manages KCJ's North American business. Id., Ex. O at 1. Finally, KCJ remains the owner of the patents-in-suit and only licensed them to KII for a limited time. Cha Decl., Ex. T, Per the license agreement, though KII need not account to KCJ for past and future infringement of the licensed patents by third party products, KCJ will share in any revenue generated by KII's success in enforcing the patents-in-suit. Id., 2-3. Considering the totality of these facts, it appears that Nokia has met its burden in demonstrating that through their affiliation KII has sufficient control over KCJ, so that it may obtain documents and information to respond to Nokia's discovery requests. Therefore, the Court GRANTS Nokia's request in this regard.
C. Responsive Documents and Information in the Possession of KWC
Contrary to KII's reliance on Third Circuit case law that explains how a parent corporation only controls a subsidiary where the subsidiary is a direct instrumentality of the parent, the Ninth Circuit applies a clear test regarding the discovery of information available from a subsidiary: “A corporation must produce documents possessed by a subsidiary that the parent corporation owns or wholly controls.” Int'l Union, 870 F.2d at 1452 (citations omitted); see Nelson v. Capital One Bank, No. C-01-0079, 2001 U.S. Dist. LEXIS 23141, at *5 (N.D. Cal. Dec. 17, 2001) (stating that while other circuits consider a variety of factors regarding control, the Ninth Circuit applies a per se test that requires a parent corporation to produce information from its wholly-owned subsidiary).
KII is the sole shareholder and parent company of KWC.
Cha Decl., Ex. N at 1; see Pl.'s Opp'n at 7 (“KII does not dispute that KWC is a subsidiary”). Therefore, pursuant to the applicable law, because KWC is the wholly-owned subsidiary of KII and KII thus exercises control over its subsidiary, the Court GRANTS Nokia's request and orders KII to produce information in possession of KWC that responds to Nokia's requests for production of documents and interrogatories.
D. Relevance of Nokia's Discovery Requests and Adequacy of KII's Responses Thereto
KII argues that it has provided sufficient responses to KII's discovery requests, and that the information Nokia seeks from the non-parties is irrelevant. KII asserts that the eleven categories of information requested are not relevant because this action focuses on Nokia's products and purported infringement rather than non-party use of the products. Nokia notes that KII raised this relevance objection for the first time in its opposition. Nokia argues its requests are relevant to Nokia's claims of invalidity because they seek information regarding the technological development of the patents-in-suit, similar work done by the alleged inventors, and, related to the issue of damages, information relating to the license and other agreements that concern the technology in the claimed patents and Kyocera products that allegedly use the patents-in-suit.
Given the liberal standard governing relevance, it appears that Nokia has articulated sufficient grounds to demonstrate that its requests are relevant to the patents-at-suit, and any such objection by KII are OVERRULED.
cc: Hon. Rudi M. Brewster United States District Judge
Following oral argument, Nokia filed a supplemental brief regarding the production of source code, explaining that in the Texas actions, KWC did not produce any copies of its source code in native format to Nokia, but instead allowed Nokia to inspect Kyocera's native-format source code at Cooley Godward's Reston, Virginia offices. Nokia asks that if the Court decides to compel Nokia to produce the code in native format, that the Court order the code to be produced for inspection by Kyocera at the offices of Nokia's counsel, Jones Day, in Dallas, Texas.
The rule provides that “it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived...A specification shall be in sufficient detail to permit the interrogating party to locate and to identify, as readily as can the party served, the records from which the answer may be ascertained.” FED. R. CIV. PROC. 33(d).
Request for Production No. 23 requests source code, documents and things to demonstrate how the operation of the accused products relate to the patents-in-suit.
Such source code, per this Order, will be produced again to KII in .pdf format.
The instant lawsuit was filed by KII on October 4, 2004.
The related Texas actions are Nokia Corp. v. Kyocera Wireless Corp., 2:2004cv00076 (E.D. Tex.) (TJW; Nokia Corp. v. Kyocera Wireless Corp., 2:2004cv00077 (E.D. Tex.) (TJW); and Nokia Corp. v. Kyocera Wireless Corp., 2:2004cv00078 (E.D. Tex.) (TJW).
KWC was established to operate a terrestrial handset business acquired from Qualcomm. Cha Decl., Ex. N at 1.
End of Document.