Fisher & Paykel Healthcare Ltd. v. Flexicare Inc.
Fisher & Paykel Healthcare Ltd. v. Flexicare Inc.
2020 WL 11563052 (C.D. Cal. 2020)
May 22, 2020

McCormick, Douglas F.,  United States Magistrate Judge

Waiver
Cooperation of counsel
Proportionality
Failure to Produce
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Summary
The court granted the plaintiff's motion to compel the defendant to provide supplemental responses to certain interrogatories and requests for production. However, the court denied the plaintiff's request for extraterritorial sales information, finding that it was not proportional to the needs of the case.
Additional Decisions
Fisher and Paykel Healthcare Limited
v.
Flexicare Incorporated
Case No. SA CV 19-00835-JVS (DFMx)
United States District Court, C.D. California
Filed May 22, 2020

Counsel

Benjamin J. Everton, Douglas Bryant Wentzel, Marko R. Zoretic, Paul A. Stewart, David G. Jankowski, Sheila N. Swaroop, Stephen C. Jensen, Knobbe Martens Olson and Bear LLP, Irvine, CA, for Fisher and Paykel Healthcare Limited.
James P. Brogan, Angela C. Tarasi, Pro Hac Vice, Brian Eutermoser, Pro Hac Vice, Peter J. Sauer, Pro Hac Vice, Matthew E. Carey, King and Spalding, Denver, CO, Abby L. Parsons, Pro Hac Vice, King and Spalding LLP, Houston, TX, Christopher C. Campbell, Pro Hac Vice, King and Spalding LLP, Washington, DC, Cori Cudabac Steinmann, Jeffrey David Mills, King and Spalding LLP, Austin, TX, Joseph N. Akrotirianakis, King and Spalding LLP, Los Angeles, CA for Flexicare Incorporated.
McCormick, Douglas F., United States Magistrate Judge

Proceedings: (IN CHAMBERS) Order re Motion to Compel Supplemental Responses

*1 This is a patent infringement lawsuit relating to respiratory care products. Before the Court is Plaintiff Fisher & Paykel Healthcare Limited (“FPH”) and Defendants' Flexicare Incorporated, Flexicare Medical Limited, and Flexicare (Group) Limited (“Flexicare”) Joint Stipulation in connection with FPH's motion to compel Flexicare to provide supplemental responses to FPH's Interrogatory Nos. 7 and 11 and Requests for Production (“RFP”) Nos. 3, 5-7, 9-13, 15-23, 25-27, 29-31, and 33. See Dkts. 123 (“Motion”), 124 (“JS”). FPH also filed a supplemental memorandum. See Dkt. 127 (“Supp.”). Having reviewed the papers and considered the arguments of counsel, the Court now rules as follows:
FPH wants Flexicare to supplement its responses to several damages-related discovery requests, including Flexicare's unit sales, revenues, costs, and profits associated with sales of the accused products (Interrogatory No. 7, RFP Nos. 7, 9-13, 15-22, 29, 30), Flexicare's annual projected sales and forecasts for the accused products (Interrogatory No. 11, RFP Nos. 25-27, 31), and the entities involved in Flexicare's alleged infringement (RFP Nos. 3, 5, 6, 23, 33). See JS at 12. Flexicare opposes on three primary grounds: (1) FPH failed to comply with Northern District of California Patent Local Rule 3-8, (2) FPH failed to comply with Central District of California Local Rule 37-1, and (3) FPH's motion is premature. See JS at 17-18. Flexicare also argues that discovery related to its extraterritorial sales is not relevant or proportional to the needs of the case. See id. at 23.
Rule 26 provides that 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.” Fed. R. Civ. P. 26(b)(1). Relevant information “need not be admissible in evidence to be discoverable.” Id. A court may limit discovery of relevant material if it determines that the discovery sought is unreasonably cumulative or duplicative, or obtainable from some other source that is more convenient, less burdensome, or less expensive, or the burden or expense of the proposed discovery weighs the likely benefit. See Fed. R. Civ. P. 26(b)(2)(C). The party who resists discovery has the burden of showing that discovery should not be allowed, and must clarify, explain, and support its objections. See DIRECTV, Inc. v. Trone, 209 F.R.D. 455, 458 (C.D. Cal. 2002).
Patent L.R. 3-8. Flexicare argues that Judge Selna adopted the Patent Local Rules, including Rule 3-8, which requires each party asserting infringement to provide its damages contentions 50 days after service of invalidity contentions. See JS at 23. FPH's refusal to disclose its damages theories prejudices Flexicare's ability “to understand what is relevant and proportional,” and so FPH's Motion should be denied. Id. at 25-26. FPH responds that Judge Selna did not adopt all the Patent Local Rules and thus FPH was not required to serve damages contentions of any kind. See JS at 20-21.
*2 The Court has confirmed that Judge Selna's practice is to adopt the Patent Local Rules except for the provisions that require damages contentions. As a result, Rule 3-8 is not applicable, and any objections based on FPH's failure to comply with Rule 3-8 are overruled.
Local Rule 37-1. Flexicare argues that that FPH failed to follow Local Rule 37-1 because the parties did not meet and confer on FPH's present discovery requests nor did FPH specifically articulate what it needs and why for its request. See JS at 27. FPH responds that the parties met and conferred several times, and that it was Flexicare's “drastic change in position” regarding Rule 3-8 that necessitated this motion. Supp. at 4.
Local Rule 37-1 requires that before filing any motion related to discovery, “counsel for the parties must confer in a good-faith effort to eliminate the necessity for hearing the motion or to eliminate as many of the disputes as possible.” C.D. Cal. L.R. 37-1. Here, it appears that with respect to Flexicare's damages-related discovery responses, the parties exchanged numerous letters and emails and met and conferred five times over five months. See JS at 13-14. It was not until March 26, 2020, that Flexicare claimed that FPH had waived any claim for damages because FPH did not comply with Patent Local Rule 3-8. See Dkt. 125, Wentzel Decl. ¶ 20, Ex. 19. On April 1, the parties met and conferred on the present issue but were unable to reach a resolution. On this record, the Court finds that FPH has sufficiently complied with Local Rule 37-1.
Premature. Flexicare argues that FPH's Motion is premature because it has already agreed to provide supplemental responses to the requests in the Motion. See JS at 28-30. Flexicare believes that FPH's goal is to avoid disclosing its damages theories while obtaining a Court order for “unrestrained damages discovery.” JS at 30. FPH responds that Flexicare's proposed compromises were unacceptable, and that Court intervention is necessary given Flexicare's incomplete supplementations. See Supp. at 4-5.
The Court agrees with FPH that the Motion is ripe. On April 10, 2020, Flexicare wrote that it was willing to provide supplemental damages-related discovery only after FPH provided a “full and complete response to Flexicare's Interrogatory No. 15,” which sought “the damages contention information required under ND Cal. Patent LR 3-8.” Wentzel Decl. ¶ 23, Ex. 22. FPH need not agree to Flexicare's pre-conditions in order to obtain Rule 26 discovery, especially with the September 7, 2020 discovery cut-off date fast approaching.
Extraterritorial Sales. FPH seeks sales information for Flexciare Medical Limited and Flexicare (Group) Limited, both of which are based in the United Kingdom. For example, FPH's Interrogatory 11 states:
Separately for each of the Accused Products, describe in detail Your (including separately for Flexicare Incorporated, Flexicare Medical Limited, and Flexicare (Group) Limited) annual projected sales of such products starting with the launch date of the product and ending with the latest expiration date of the Patents-in-Suit, including the unit volume, revenue, COGS, gross profits, and net profits of such sales, and identify documents corroborating such projections and the three (3) individuals most knowledgeable regarding Your annual projected sales.
*3 Wentzel Decl. ¶ 16, Ex. 15. Flexicare contends that extraterritorial sales information is irrelevant and disproportional to the needs of the case. FPH counters that Flexicare waived this objection and that the information is relevant to the determination of a reasonable royalty (for damages) and as evidence of commercial success (to rebut Flexicare's argument that the patents are obvious and thus invalid).
Flexicare did not waive its objection. Several of the Interrogatories and RFPs at issue were propounded on Flexicare prior to the UK entities being named as parties. For others, Flexicare specifically objected to FPH's request for extraterritorial sales information. See, e.g., id. ¶ 17, Ex. 16 (“Defendants also object to this interrogatory as not relevant to either party's claims or defenses to the extent it seeks information regarding products not subject to the patent laws of the United States.”).
Next, the Court agrees that the foreign sales information is not proportional to the needs of the case. Importantly, until the telephonic hearing, FPH did not argue, anywhere, that Flexicare's extraterritorial sales information was needed to determine royalties or obtain evidence of commercial success. Instead, FPH argued that a recently produced document “contradicts Flexicare's prior representations about [the UK entities] lack of U.S. activities.” Supp. at 3. That the foreign entities might have greater U.S. involvement than Flexicare let on is not sufficient to kick open the door to foreign sales information. For now, FPH will have to make do with the domestic sales data.
Consequently, FPH's Motion is GRANTED IN PART. Flexicare is ORDERED to serve full and complete verified answers to FPH's Interrogatory Nos. 7 and 11 and shall complete their document production for RFPs Nos. 3, 5-7, 9-13, 15-23, 25-27, 29-31, and 33 within 14 calendar days of the date of this order. Flexicare need not, however, produce its extraterritorial sales information. If needed, disagreements about the sufficiency of Flexicare's supplemental production may be resolved by informal teleconference with Judge McCormick.