*1 For the reasons discussed below, Plaintiff's motion to compel Defendant to produce financial information [212] is granted.

Kove IO, Inc. (“Kove”) has sued Amazon Web Services, Inc. (“AWS”) for alleged infringement of three patents: U.S. Patent Nos. 7,103,640 (the “’640 patent”), 7,233,978 (the “’978 patent”), and 7,814,170 (the “’170 patent”). The patents-in-suit disclose a distributed data storage technology that can be used for large-scale cloud computing. Kove alleges that two AWS products, Amazon S3 and DynamoDB, infringe its patents. Amazon S3 allows users to store data in the cloud, while DynamoDB provides access to scalable database tables. Kove has moved to compel AWS to disclose financial information that it contends is necessary to calculate damages based on a reasonable royalty. Kove's Requestion for Production 84 (hereinafter “RFP 84”) seeks:

(Ex. A to Kove's Mot. [212-1] at 22.) In its initial response, AWS stated that it

(Ex. B to Kove's Mot. [212-2] at 41.) AWS agreed to produce responsive documents that “are sufficient to show sales and revenue information for S3 and DynamoDB” only. (Id.)

Kove continues to seek production of “AWS-level financial information,” such as “cash flow statements, income statements, balance sheet statements, and profit-and-loss statements, as well as any contemporaneously created financial disclosures or explanatory footnotes that would commonly accompany and explain the financial statements.” (Pl.’s Mot. [212] at 2.) Kove argues that this information is relevant because it may provide evidence of convoyed sales, in which sales of the accused products drive sales of non-infringing products. Alternatively, Kove argues that this information may “provid[e] context as to how AWS allocates costs and recognizes product-level revenue.” (Ex. C to Pl.’s Mot. [212-3] at 3.) Kove contends that Amazon's 10Q and 10K statements are insufficient because they do not contain the requisite level of detail about AWS. Kove also insists that it cannot discern the necessary information from product-level financial statements for S3 and DynamoDB because those statements aggregate fixed costs into line items, with no indication of what costs are included in those calculations. (See Ex. K (S3 financial statement), Ex. L (Dynamo DB financial statement) to Pl.’s Mot. [213].) To date, AWS's only AWS-level financial production includes a spreadsheet containing four rows of high-level financial data, including an aggregated line item for “fixed costs.” (See Ex. N to Pl.’s Mot. [213].)

*2 The parties have met and conferred numerous times in an attempt to resolve this discovery dispute. See LR 37.2. Kove now seeks an order compelling AWS to produce the documents described in RFP 84. See FED. R. CIV. P. 37(a)(3)(B).

The Federal Rules of Civil Procedure provide for broad, liberal discovery. See FED. R. CIV. P. 26(b)(1) (“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”). In the discovery context, “relevancy will be construed broadly to encompass ‘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.’ ” White v. Kenneth Warren & Son, Ltd., 203 F.R.D. 364, 366 (N.D. Ill. 2001) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)).

A party moving to compel production bears the initial burden of establishing that the information sought is relevant. Eternity Mart, Inc. v. Nature's Sources, LLC, No. 19-CV-02436, 2019 WL 6052366, at *2 (N.D. Ill. Nov. 15, 2019) (collecting cases). If the information appears relevant, the party resisting production has the burden of showing why the request is improper. Id. Broad discovery is particularly important in patent cases “in order to reduce the maximum amount of evidence, but the right to discovery does have ultimate and necessary boundaries.” Trading Techs. Int'l, Inc. v. eSpeed, Inc., No. 04 C 5312, 2005 WL 1300778, at *1 (N.D. Ill. Apr. 28, 2005) (internal citations and quotation marks omitted).

In its motion, Kove argues that the financial information it has requested is relevant to its damages claim. See 35 U.S.C. § 284 (patentees may recover “a reasonable royalty for the use made of the invention by the infringer”). Specifically, Kove contends that AWS-level financial information is necessary to calculate the allocation of higher-level operating costs among various AWS products, the effect of convoyed sales (if any), and the profitability of the accused products. Kove anticipates that its damages expert will apply the “income” or “analytical” approach to calculate a reasonable royalty by “compar[ing] the infringer's profits without infringement to the infringer's profits with infringement.” Ultratec, Inc. v. Sorenson Commc'ns, Inc., 2014 WL 5080411, at *4 (W.D. Wis. Oct. 9, 2014) (emphases in original) (collecting cases applying this approach); see also Aqua Shield v. Inter Pool Cover Team, 774 F.3d 766, 770 (Fed. Cir. 2014) (“[T]he core economic question is what the infringer, in a hypothetical pre-infringement negotiation under hypothetical conditions, would have anticipated the profit-making potential of use of the patented technology to be, compared to using non-infringing alternatives.”) (emphasis in original). According to Kove, AWS-level financial information will allow Kove to calculate the profits associated with S3 and DynamoDB more accurately by determining whether AWS-level costs should be allocated across products and then isolating the profits attributable to infringement. Kove maintains that the product-level financial documents that AWS has produced thus far are insufficient to make this determination.

*3 Kove further argues that the requested information pertains to several Georgia-Pacific factors for calculating a reasonable royalty, including “[t]he established profitability of the product made under the patent; its commercial success; and its current popularity,” “[t]he portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions,” and “[t]he portion of the realizable profit that should be credited to the invention....” Georgia-Pac. Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified sub nom. Georgia-Pac. Corp. v. U.S. Plywood-Champion Papers, Inc., 446 F.2d 295 (2d Cir. 1971). AWS-level financial statements would also contain data about non-accused products, which is relevant to another Georgia-Pacific factor: the “effect of selling the patented specialty in promoting sales of other products of the licensee; that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.” Id. Kove argues that convoyed sales “are likely significant here, because the accused products involve foundational technology that enabled AWS's broader market gains.” (Pl.’s Mot. at 8.) Finally, Kove suggests that AWS-level information will aid its comparison of the profits of the accused products with related non-infringing products. See Georgia-Pacific, 318 F. Supp. at 1120 (“The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.”).

AWS responds that AWS-level financial information is simply not relevant, pointing to a “wall of case law” concluding that financial information about non-infringing products is irrelevant to the determination of a reasonable royalty. (AWS Opp'n [225] at 1; id. at 5–7 (citing Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC, No. 1:CV-09-1685, 2011 WL 13199148, at *1 (M.D. Pa. Dec. 21, 2011); C&C Jewelry Mfg., Inc. v. West, No. C09-01303 JF (HRL), 2011 WL 2559638, at *1 (N.D. Cal. June 28, 2011); Generac Power Sys., Inc. v. Kohler Co., No. 11-CV-1120-JPS, 2012 WL 2049945, at *3 (E.D. Wis. June 6, 2012); Luminara Worldwide, LLC v. Liown Elecs. Co., No. 14-3103 (SRN/FLN), 2016 WL 6908109, at *1–2 (D. Minn. Jan. 11, 2016); Carolina Waterworks, Inc. v. Taylor Made Group, LLC, No. 2:12-CV-02568-DCN, 2013 WL 4018678, at *2–3 (D.S.C. Aug. 6, 2013); Crystal Photonics, Inc. v. Siemens Med. Sols. USA, Inc., No. 6:11-cv-1118-Orl-31DAB, 2013 WL 12158132, at *1 (M.D. Fla. Aug. 2013)).)

As the court reads these cases (none of them binding authority), they do not reflect a presumption against the discoverability of company-wide financial information; rather, in each case, the court simply determined that the requested information was not relevant to calculate a reasonable royalty for the patents-in-suit. See Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prod., LLC, No. 09-C-0916, 2011 WL 3240452, at *1–2 (E.D. Wis. July 27, 2011) (denying motion to reconsider order compelling production of company-wide financial information in light of C&C Jewelry, 2011 WL 2559638, noting that the decision is “unpublished, distinguishable, and not binding on this court,” and that defendant's “understandable concerns over its sensitive company-wide financial information are adequately addressed by the protective order already in place in this matter”). Kove has identified at least one in-circuit decision (albeit not a recent one) in which then-district judge Rovner affirmed a magistrate judge's order compelling the production of company-wide financial information to establish a reasonable royalty. See Amsted Indus. Inc. v. Nat'l Castings, Inc., No. 88 C 0924, 1989 WL 68393, at *1 (N.D. Ill. June 15, 1989) (Rovner, J.).

Notably, AWS does not argue in its opposition brief, as it did in its initial response to Kove's RFP 84, that producing the requested information would be burdensome. Kove believes that the requested information may be contained in as few as 100 documents. (See [212] at 9.) Rather than dispute this point, AWS insists that it will “seek to exclude any expert testimony purporting to rely on such information.” (AWS Opp'n [225] at 2.) But information “need not be admissible in evidence to be discoverable.” FED. R. CIV. P. 26(b)(1). Kove need not demonstrate that the requested information will satisfy Federal Rules of Evidence 401, 403, and 702 at this stage. It also need not prove whether the proper royalty base is the smallest salable patent-practicing unit or the entire market value. See Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 904 F.3d 965, 977 (Fed. Cir. 2018) (contrasting the two approaches). AWS's objections to the admissibility of expert testimony relying on the requested information, the viability of a convoyed sales theory, and the existence of similar non-infringing products are therefore premature.

*4 With regard to convoyed sales, AWS correctly notes that Kove has not identified specific non-infringing products that it believes have a functional relationship with the accused products. See Am. Seating Co. v. USSC Grp., Inc., 514 F.3d 1262, 1268 (Fed. Cir. 2008) (“Our precedent has not extended liability to include items that have essentially no functional relationship to the patented invention and that may have been sold with an infringing device only as a matter of convenience or business advantage.”). The court therefore considered ordering discovery of documents relating only to the non-accused products that work in conjunction with the accused products. That approach could generate the need for additional briefing, however. For that reason, and because AWS has not challenged Kove's assertion that the burden of the broader production Kove seeks is low, the court overrules AWS's objection.

The court recognizes that, as AWS observes, courts have denied discovery requests based on undeveloped convoyed sales theories. Those cases appear to be distinguishable, however. See RTC Indus., Inc. v. Fasteners for Retail, Inc., No. 1:17-cv-03595, Dkt. 313, at *2 (N.D. Ill. Nov. 26, 2019) (denying motion to compel where plaintiff sought discovery of sales data of “any unpatented product that was sold to a customer of an accused product”); BASCOM Glob. Internet Servs., Inc. v. AT&T Corp., No. 3:14-CV-3942-M, 2017 WL 11490077, at *2 (N.D. Tex. July 31, 2017) (denying motion to compel where plaintiff sought discovery of revenue data by customer for all of defendant's products and services); Thought, Inc. v. Oracle Corp., No. 12-CV-05601-WHO, 2015 WL 2357685, at *4 (N.D. Cal. 2015) (affirming denial of motion to compel discovery of unspecified financial information where there was “plainly no way that the allegedly infringing middleware [was] part of the same ‘functional unit’ as the products for which [plaintiff sought] discovery”).

For its part, Kove is not seeking customer-level sales data that might show that AWS customers who purchased the accused products also purchased non-accused products. Instead, Kove is seeking high-level financial records that contain aggregate data about products in the same unit as the accused products. In its reply brief, Kove notes that Amazon EC2, a non-accused product, “uses S3.” (Pl.’s Reply [230] at 10 (quoting Amazon EC2 webpage).) Kove also reiterates its view that the accused products “involve foundational technology that underlies AWS's broader position in the market.” (Id.) Kove has not yet committed to a position on whether accused and non-accused AWS products should be considered a “functional unit” for purposes of the royalty base (id. at 11 n.6), but convoyed sales may nonetheless be relevant for calculating a reasonable royalty rate. See Infinity Computer Prods., Inc. v. Epson Am., Inc., No. CV 18-02532 RGK (RAOx), 2018 WL 7890859, at *3 (C.D. Cal. Dec. 14, 2018) (distinguishing Am. Seating, which considered lost profits based on convoyed sales, and collecting cases in which convoyed sales were relevant to a reasonable royalty rate). To be sure, Kove will need to provide a more robust theory of convoyed sales on the merits, but at this stage, its theory provides plausible support for discovery of the requested financial information.

AWS also cites cases denying discovery requests for documents relating to similar non-infringing products. Once again, however, these cases are distinguishable in that they involved attempts to uncover information about potentially infringing products, not high-level, company-wide financial information. See SPH Am., LLC v. Research in Motion, Ltd., No.13cv23290 CAB (KSC), 2016 WL 6304510, at *3 (S.D. Cal. June 30, 2016) (denying request for discovery where plaintiff “produced no evidence demonstrating the inability to identify defendant's other similar infringing devices, if any, from [publicly] available information”) (emphasis in original); Hologram USA, Inc. v. Pulse Evolution Corp., No. 2:14-CV-0772-GMN-NJK, 2015 WL 13238450, at *3–4 (D. Nev. Dec. 18, 2015) (denying motion to compel discovery regarding “all holographic-like projection devices Defendants make, use, or sell,” in part because the request violated local patent rules requiring plaintiffs to identify accused devices with specificity) (emphasis added).

*5 The court understands that the burden of producing the requested information is low, and believes that any concerns about confidentiality are adequately addressed by the court's protective order. (See Protective Order of 7/10/19 [55].) Kove need not prove its damages theory on the merits at this stage to gain access to AWS's financial information. AWS's arguments concerning admissibility may well be dispositive at the summary judgment, Daubert, or trial stage, but are premature at this time.

Kove’ motion to compel AWS to produce financial information is granted.